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Tax Incentive Impact Survey Results

Easement Incentive Works; Conservation Boosted by 535,000 Acres


In August 2006, Congress enhanced the tax incentive for the donation of conservation easements by allowing landowners to deduct a larger share of their income over a longer period of time. To assess the impact of this powerful new incentive, the Land Trust Alliance conducted a survey of 480 land trusts that together represented over 90% of the easement acreage reported in the 2005 Land Trust Census. Their easements held at the end of 2007 were compared to data they had given the Alliance in 2003 and 2005 to demonstrate the accelerating pace of conservation.

America’s land trusts protected 2,027,553 acres with conservation easements in the first two years with the enhanced tax incentive, 535,000 more acres than were protected in the previous two years. That increase of 36% represents an area larger than Washington’s Mount Rainier National Park, Virginia’s Shenandoah National Park and Utah’s Arches National Park combined.

We can’t say how much of that increase is due to the new tax incentive – but land trusts tell us it is a big factor. Moreover, the new incentive didn’t pass until August of 2006 – so its effect is actually much greater than 260,000 acres a year, and it has an even greater potential to expand as landowners learn more about it.

The number of easements held by state and local land trusts grew at an even faster pace than acreage protected. In 2006 and 2007, land trusts added over 6,000 conservation easements, about 2,000 more than in 2004-2005 – nearly a 50% increase. The number of conservation easements completed grew in every region, but nowhere more than in the Southeast where land trusts did twice as many easements in 2006-2007 as in the previous two years.

07 Impact Survey Regional Numbers

The new Incentive was designed specifically to help modest-income agricultural landowners, whom it allows to deduct up to 100% of their income.  This seems to be working just as intended as its impact in the Midwest has been nothing short of spectacular.  Midwest land trusts conserved nearly 3 times as many acres as they did in the previous two-year period, increasing the total easement acreage in the region by 59%.

A small number of mega-easements have a dramatic conservation impact, but including them greatly distorts trend data. We made a decision to exclude easements in excess of 100,000 acres. As such, we did not include the New England Forestry Foundation’s 2005 purchase of an extraordinary 312,000 acre easement in Maine, 1,000 times larger than the average easement.

We did include the 2004 purchase of the 81,400 acre Hearst Ranch easement in California and the 2005 donation of the 82,000 acre Trinchera Ranch easement in Colorado.  Without these two large easements the Pacific Region and Southwest Region would have shown 43% and 15% increases in acres conserved on the chart below.

07 Impact Survey Regional Acres

Unfortunately, the enhanced easement incentive is set to expire again at the end of 2013!  Senators Max Baucus (D-MT) and Orrin Hatch (R-UT) and Congressmen Jim Gerlach (R-PA) and Mike Thompson (D-CA) recently introduced legislation to make this incentive permanent. Please take action today and ask your Senators and Representative to co-sponsor, S. 526 or H.R.2807. Click here for more information on that legislation.

Click here for a fact sheet on the survey.

For questions about the survey please contact policy@lta.org.

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Advocates Alerts

November 6: With only eight weeks remaining before Congress adjourns (of which Congress will be in Washington for only four), there is limited time to act. Ask your senators to urge their party’s leadership to include the charitable package in any year-end tax legislation. We’ve been meeting with Senate offices and have been encouraged by their willingness to consider making some tax extenders permanent. This puts us in a good position, but we need you to reinforce that special places are being lost because the incentive has expired. Learn more »

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