Georgia Tightens State Tax Credit Incentives 

By: Kevin McGorty, Director, Tall Timbers Land Conservancy

Farm tractor The Georgia General Assembly recently passed a major bill, HB 386, ( tinkering with Georgia's tax code. The Governor is expected to sign the legislation. Buried deep within the pages of the bill are major reforms to Georgia’s popular tax credit incentives administered by the Georgia Land Conservation Program. Since 2007, the Tax Credit Program has protected over 116,000 acres through the certification of 343 conservation donations. Last year the program got a boost when the Georgia General Assembly passed a bill that allowed the tax credits to be transferred from their original donors to any third parties with state income tax liabilities. It was anticipated that the transfer of tax credits would encourage small farm and forest land owners to consider conservation of their properties as they could sell the tax credits they could not use. Now with some of the tightening provisions, the success of the program is unclear. A highlight of a few of those provisions include:

  • Starting January 1, 2014, qualified nonprofit organizations must be accredited by the Land Trust Accreditation Commission. Currently, only five of the 27 land trusts in the state are accredited. Tall Timbers is a fully accredited land trust.
  • The cap on the tax credit is $250,000 for individuals and a total of $500,000 for all parties in a partnership (reduced from previous $1 million).
  • Subdivision is prohibited for a donated easement of less than 500 acres and limited to one subdivision for a donated easement of 500 acres or more.
  • There is a $5,000 application fee.
  • Requires land owners to submit an appraisal to be reviewed by the State Properties Commission.
  • Any tax credits earned by the taxpayer in the taxable years beginning on or after January 1, 2013 may be transferred or sold only once.
  • No credit shall be allowed with respect to any amount deducted from taxable net income by the taxpayer as a charitable contribution.

There are a number of other provisions that ensure that the conservation values on a property are protected, thus upholding the public interest in the program. While other states such as Colorado and Virginia offer more flexible programs, hopefully, Georgia’s attempt at offering a transferrable tax credit will be a work in progress and—eventually—a success.

« Back to eNews