TAX CREDIT EXCHANGE
How to Earn Credits
1. Donate a conservation easement.
Landowners earn conservation tax credits by donating a conservation easement that is supported by a qualified appraisal to a certified land trust or government open space program. In the easement, the landowner agrees to maintain their property’s conservation values. Tax credits (Credits) are issued at 90% of the value of the donated easement, up to $5 million. Credits may be used in increments of up to $1.5 million each year, so a $5 million credit earned would be appplied over four years. Contact the Tax Credit Exchange (TCE) for guidance on meeting state requirements, maximizing your Credit, and transferring your Credit at the most competitive rates.
2. Apply for Credit certification.
Once an easement is donated, the landowner applies to the state for Credit certification. Applications meeting the complex state requirements receive a Credit certificate that can either be applied to offset the landowner’s own state income taxes or transferred to a third party to immediately monetize its value. At no charge, TCE reviews projects prior to donation to increase the likelihood of meeting state Credit requirements, collects required documentation supporting certification, prepares draft applications, and after approval by the landowner, submits the applications to the state.
3. Strategize the optimal time for your donation.
The recent increase in Credit valuation to 90% has achieved its goal of increasing the pace of private land conservation. While all certified credits will be issued by the state, there is an overall annual credit cap of $45 million. Where the state is with respect to reaching that cap may affect landowner decisions on the most advantageous time to make a donation. TCE advises landowners on donation timing and its implications.
Contact the TCE early for our expertise, experience, and professional relationships to reduce risk, increase likelihood of credit certification, strategize optimal donation timing, and transfer your credit at the best market rate.