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Tax Credit Program

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Georgia Conservation Credit Exchange Program

 

History

 

On April 21st, 2006, Georgia Governor Sonny Perdue signed House Bill 1107 (amended in 2009) which sets forth:

 

A taxpayer shall be allowed a state income tax credit against the tax imposed by Code Section 48-7-20 or Code Section 48-7-21 for each qualified donation of real property for conservation purposes. Except as otherwise provided in subsection (d) of this Code section, such credit shall be limited to 25% of the fair market value of the donated property. The credit is limited to $250,000 for individuals, $500,000 per corporation, and up to 1 million (in aggregate) for partnerships. Discounted sales of property or conservation easements below fair market value are also considered qualified donations. The amount of the credit used in any one year may not exceed the amount of state income tax otherwise due. Any unused portion of the credit may be carried forward for ten succeeding years. 

 

Transferability

 

On May 11th, 2011, Georgia Governor Nathan Deal signed House Bill 346 which sets forth:

Any tax credits under this Code section earned by a taxpayer and previously claimed but not used by such taxpayer against such taxpayer's income may be transferred or sold in whole or in part by such taxpayer, subject to the following conditions, to another Georgia taxpayer:

(1) The transferor shall submit to the department a written notification of any transfer or sale of tax credits within 30 days after the transfer or sale of such tax credits. The notification shall include such transferor's tax credit balance prior to transfer, the remaining balance after transfer, all tax identification numbers for each transferee, the date of transfer, the amount transferred, and any other information required by the department;

(2) Failure to comply with this subsection shall result in the disallowance of the tax credit until the taxpayer is in full compliance;

(3) In no event shall the amount of the tax credit under this subsection claimed and allowed for a taxable year exceed the transferee's income tax liability. Any unused credit may be carried forward to subsequent taxable years provided that the transfer or sale of this tax credit does not extend the time in which such tax credit can be used. The carry-forward period for tax credit that is transferred or sold shall begin on the date on which the tax credit was originally earned; and

(4) A transferee shall have only such rights to claim and use the tax credit that were available to the transferor at the time of the transfer. To the extent that such transferor did not have rights to claim and use the tax credit at the time of the transfer, the department shall either disallow the tax credit claimed by the transferee or recapture the tax credit from the transferee. The transferee's recourse is against the transferor."

Georgia is now the fifth state that allows for the transfer of land conservation tax credits, joining Colorado, Virginia, South Carolina and New Mexico. Georgia’s provision becomes effective January 1, 2012.

The Mechanisms of Transferability

The purpose of the conservation tax credit is to increase the financial incentives for a willing landowner to donate land or place a permanent conservation easement on their property. Taxpayers can claim a credit against their state income tax of up to 25% of the fair market value of the donated property. The credit is limited to $250,000 for individuals, $500,000 per corporation, and up to 1 million (in aggregate) for partnerships. The amount of the credit used in any one year may not exceed the amount of state income tax otherwise due. Any unused portion of the credit may be carried forward for ten succeeding years. 

The property must be donated to a government entity or to a qualified non-profit organization and must meet the State’s conservation purposes. The Georgia Department of Natural Resources (GaDNR) is responsible for certifying that donated property meets these conservation purposes and that the property is being donated to a qualified organization.

After GaDNR certifies that the donated conservation easement qualifies for a Georgia conservation credit, the Atlantic Coast Conservancy offers to match those certified easement donors wishing to sell tax credits with motivated buyers, and will provide all of the necessary documentation for the transfer of the credits and coordinates the transfer between the buyer and seller. This will be provided as a fee-based service calculated as a small percentage of the total discounted cost of the transferred state tax credits.

In accordance with the Land Trust Alliance Standards & Practices, the Atlantic Coast Conservancy will refrain from giving specific legal, financial and tax advice.