In addition to the Federal, Estate, and Property tax benefits of donating a conservation easement, easement donors in Virginia have a significant state income tax benefit in the form of a state income tax credit. Moreover, easement donors who have more credit than they can use may sell their tax credits to other taxpayers. This represents a significant incentive for land conservation in Virginia.

The "Virginia Land Conservation Incentives Act of 1999," as amended, allows Virginia taxpayers who donate a conservation easement to claim a credit against their Virginia state income tax liability of 40% of the value of the donated easement. For example, if your easement is valued at $500,000, the credit is $200,000. The amount of the credit used may not exceed the amount of state income tax otherwise due. Any portion of the credit that is not used up in the year the easement is donated can be carried over for an additional 10 years.

The amount of the credit claimed by a taxpayer in any one year may not exceed $100,000. A taxpayer entitled to a land preservation tax credit is allowed to transfer unused but otherwise allowable credit to another taxpayer. For landowners claiming tax credits of one million dollars or more, verification of the conservation value (View LPC1 Schedule B Form - PDF) of the donated real property interest by the Department of Conservation and Recreation as required by 58.1-512(D)(3)(a) of the Code of Virginia must first occur before the credits can be issued.

The Virginia Land Preservation Tax Credit (LPTC) has had great success advancing Virginia's land conservation goals. Since it was created in 2000, the LPTC program has been responsible for protecting over 250,000 acres of land critical to the health and identity of Virginia through conservation easements statewide.