Conservation Tax Incentive Extended by Congress: Benefits Apply to Landowners who Donate Toward Easement on Property

Press Release

One of the lesser-known elements of the recently passed federal tax package is a provision that allows landowners to get substantial benefits for protecting their land under conservation easements.

The incentive has been key in the past for North Coast landowners who have opted to sell development rights on their land and often undertake different management strategies. The provision applies to donations landowners make toward the value of the conservation easement, and local land trust representatives say it's vital for projects going forward.

The bill -- which was authored by Rep. Mike Thompson but rolled into the larger tax package -- allows landowners to take a 50 percent income tax deduction for donating a conservation easement. It allows farmers and ranchers to deduct all of their income for such a donation, and it increases the number of years in which a landowner can take deductions from six to 16 years, according to the Land Trust Alliance. The extended incentive applies to donations in 2010 and 2011.

North Coast Regional Land Trust Executive Director Lindsay Magnuson said that every easement project her group has helped put together since 2006 has included at least a partial donation from the landowner. Since 2006, the land trust has helped put 12,000 acres under conservation easement.

She said that the land trust is currently working with a landowner who is interested in selling an easement on 1,000 acres that is ecologically significant and surrounded by working ranches. The landowner has been on the fence about the project, she said, and is encouraged now that the bill has passed.

"It didn't pencil for him unless this bill was passed," Magnuson said.

Magnuson said that such incentives are particularly important, as other measures like the state's Williamson Act -- which offers tax breaks to landowners who keep their land in agricultural production -- are struggling for funds.

Thompson, D-Helena, has pushed for the extension of the federal tax incentive three times previously, but this time voted against the larger tax package it was rolled into. Of particular concern, Thompson said, were payroll tax cuts that he believes will lead to cuts in Social Security, a lack of tax assistance to lower income individuals and families and an increase in the federal deficit.

However, Thompson said the conservation easement incentives are vital and have gone toward helping put 500,000 acres of land across the country under development protection.

"This is really important," Thompson said, "and it's important for all the things you and I love."

He said the bill even had supporters in big cities like New York, whose water supply comes from land under the threat of development.

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