Bulletin Number
VTB 12-2
Tax Type
Land Preservation Tax Credit
Description
Information Regarding the Land Preservation Tax Credit
Topic
Land Preservation Tax Credit
Date Issued
03-02-2012
TAX BULLETIN 12-2
Virginia Department of Taxation
March 2, 2012
IMPORTANT INFORMATION REGARDING
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 (“the Department”) 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 2011, 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. Therefore, for calendar year 2011, the cap was $108,424,000.
Using information obtained from United States Bureau of Labor Statistics, the average CPI-U for the 12-month period ending August 31, 2011 increased by approximately 11.05 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 $111,054,000 for calendar year 2012.
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 |
2012 | 11.05% | $111,054,000 |
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