Federal tax breaks to save land should become permanent

RELEASE: March 9, 2007 – Volume XXXVII, No. 10

U.S. Senator Max Baucus (D-MT) recently introduced a bill (S.469) to make permanent a package of tax incentives approved last year for donating conservation easements. The current tax breaks are scheduled to expire at the end of 2007. President Bush’s FY2008 budget proposal also includes a provision that would make these expanded tax incentives permanent. This is good news for a conservation community seeking more tools to help preserve land and limit sprawl.

Conservation easements are legally enforceable agreements that preserve privately owned open space to protect its natural, agricultural, and scenic resources. A non-profit land trust can buy a conservation easement on a parcel of open space or farmland for a fraction of the cost of the land, and still prevent future development. Easements have become a staple of land and natural resource conservation efforts nationwide.

Tax breaks, however, provide landowners with an incentive to donate easements, or sell them at a bargain price below market value. They receive a tax deduction for making what amounts to a substantial charitable gift.

The conservation community has worked for some time to expand incentives for conservation easement donations so it was thrilled when Congress expanded the federal tax breaks last year. Under the new provisions, landowners can take a tax deduction of up to 50% of their income, as compared to 30% under previous law, and qualifying farmers can actually deduct up to 100% of their income. Donors also now have up to 16 years to take tax deductions for conservation easement donations as opposed to the previous six year time period – a significant benefit for those whose annual incomes were not high enough to enjoy the full tax benefit of their donation under the old guidelines.

From the moment they were announced, the conservation community has been working to make the new tax incentives permanent. “The changes enabled family farmers, ranchers and other moderate-income landowners to get a significant tax benefit for such donations, which simply wasn’t possible under prior law,” said Russell Shay, Director of Public Policy for the national Land Trust Alliance. “Currently, the 2006 law will expire at the end of this year. S.469 would prevent that, and permanently ensure donations of conservation easements are a possibility for modest income level landowners.”

These landowner benefits are especially important in light of the drastic cuts proposed for federal conservation funding. Making the current tax incentives permanent would be nothing but a boon to land conservation efforts.

Now it’s our turn to encourage our federal legislators to go the rest of the way and pass the necessary legislation to make the improved conservation tax incentives permanent.

Contact your Representatives and Senators to let them know you would appreciate their support. There are many ways to contact your federal elected officials, including through the Land Trust Alliance’s website at www.lta.org, where you’ll also find more information on the tax incentive issue. Phone numbers for your Senators’ and Representatives’ offices can also be found at www.senate.gov and www.house.gov, or by calling the Capitol Switchboard at (202) 224-3121.

I hope you’ll contact me at info@njconservation.org, or visit NJCF’s website at www.njconservation.org, for more information about conserving New Jersey’s precious land and natural resources.

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