Tax Type
Land Preservation Tax Credit
Description
New Cap Amount for the Land Preservation income Tax Credit
Topic
Land Preservation Tax Credit
Date Issued
04-28-2008
TAX BULLETIN 08-7
Virginia Department of Taxation
April 28, 2008
IMPORTANT INFORMATION REGARDING
THE LAND PRESERVATION INCOME TAX CREDIT
NEW CAP AMOUNT FOR THE LAND PRESERVATION INCOME TAX CREDIT
House Bill 5019 (Chapter 4, Special Session I of 2006) made several changes to the Land Preservation Tax Credit. One of these changes established a $100 million cap on the amount of total credits that may be issued by the Department of Taxation (“TAX”) during a calendar year.
In addition, the legislation provided a mechanism by which this cap may be increased because of inflation. Under Va. Code § 58.1-512 D 4b, beginning with calendar year 2008, the $100 million cap must be increased by an amount equal to $100 million multiplied by the percentage by which the consumer price index for all-urban consumers published by the United States Department of Labor (CPI-U) for the 12-month period ending August 31 of the preceding year exceeds the CPI-U for the 12-month period ending August 31, 2006.
New Cap Amount
Using information obtained from United States Bureau of Labor Statistics, TAX compared the CPI-U for the 12-month period ending August 31, 2007 (“second 12-month period”) with the CPI-U for the 12-month period ending August 31, 2006 (“first 12-month period”). Based on these statistics, the average CPI-U for the second 12-month period increased by approximately 2.29% over the average for the first 12-month period. As a result, the cap for the Land Preservation Income Tax Credit will be increased to $102,287,000 for calendar year 2008.
If you have additional questions, please visit our website at http://www.tax.virginia.gov, or contact the Tax Credit Unit at (804) 786-2992.
Rulings of the Tax Commissioner