January 16, 2009
New MA Law: State Income Tax Credit for Landowners Who Donate Conservation Land
This week, Massachusetts Governor Deval Patrick signed into law a bill establishing a state income tax credit for landowners who voluntarily donate qualifying conservation land to a municipality, the state, or a nonprofit conservation organization. Under the initiative, which goes into effect in 2011, the Massachusetts Executive Office of Energy and Environmental Affairs will determine whether properties proposed for donation meet public interest standards for natural resource protection. Eligible lands include those that protect drinking water supplies, wildlife habitat, scenic vistas, and those that boost the tourism, agricultural and forest product industries. The incentive requires that gifts of land be permanently protected. The tax credit is valued at 50% of the appraised fair market value of the land and limited to $50,000 per gift. Further, it cannot exceed the donor’s annual state income tax liability but may be carried forward for 10 consecutive years.
Under a similar tax incentive program in North Carolina, it was found that for every $1 in lost revenue, the state gets $12 in land. A cap is in place to ensure that no more than $2 million in tax credits is granted each year.
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