Bulletin Number
VTB 10-11
Tax Type
Land Preservation Tax Credit
Description
Land Preservation Tax Credit
Topic
Land Preservation Tax Credit
Date Issued
11-15-2010
TAX BULLETIN 10-11
November 15, 2010
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.
For example, for Calendar Year 2010, the average CPI-U for the 12-month period ending August 31, 2009 increased by approximately 6.8 percent over the average for the 12-month period ending August 31, 2006. Therefore, for calendar year 2010, the cap was $106,845,000.
Using information obtained from United States Bureau of Labor Statistics, the average CPI-U for the 12-month period ending August 31, 2010 increased by approximately 8.4 percent over the average for the 12-month period ending August 31, 2006. As a result, the cap for the Land Preservation Income Tax Credit will be increased to $108,424,000 for calendar year 2011.
The following chart depicts the growth in the CPI-U from 2006 through the applicable year for each year that the $100,000,000 has been increased. It also shows the amount of the cap for each applicable year.
If you have additional questions, please visit our website at www.tax.virginia.gov, or contact the Tax Credit Unit at (804) 786-2992.
Virginia Department of Taxation
November 15, 2010
IMPORTANT INFORMATION REGARDING
THE LAND PRESERVATION INCOME TAX CREDIT
New Cap Amount
THE LAND PRESERVATION INCOME TAX CREDIT
New Cap Amount
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.
For example, for Calendar Year 2010, the average CPI-U for the 12-month period ending August 31, 2009 increased by approximately 6.8 percent over the average for the 12-month period ending August 31, 2006. Therefore, for calendar year 2010, the cap was $106,845,000.
Using information obtained from United States Bureau of Labor Statistics, the average CPI-U for the 12-month period ending August 31, 2010 increased by approximately 8.4 percent over the average for the 12-month period ending August 31, 2006. As a result, the cap for the Land Preservation Income Tax Credit will be increased to $108,424,000 for calendar year 2011.
The following chart depicts the growth in the CPI-U from 2006 through the applicable year for each year that the $100,000,000 has been increased. It also shows the amount of the cap for each applicable year.
Year | CPI-U Amount Over 2006 Base Year | Cap Amount |
2007 | - | $100,000,000 |
2008 | 2.29% | $102,287,000 |
2009 | 6.6% | $106,647,000 |
2010 | 6.8% | $106,845,000 |
2011 | 8.4% | $108,424,000 |
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