Georgia Extends Conservation Tax Credit

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In short: The Georgia Conservation Tax Credit has been extended, but restrictions apply.

On May 10th, 2022, Governor Kemp signed into law House Bill 586, which amended O C G A sec. 48-7-29.12 by extending Georgia’s Conservation Tax Credit. The Credit previously expired December 31, 2021 after the preceding House Bill 477 failed to pass in the last legislative session, but received overwhelming support from the Georgia Assembly in this years’ session.

What is the Conservation Tax Credit?

In general, the Conservation Tax Credit provides a state income tax credit to landowners for their qualified conservation use donation of real property. Previously, the aggregated land conservation credit allowed was $30 million per calendar year. However, with House Bill 586 reauthorizing the credit from June 1, 2022 through December 31, 2026, the aggregate credit allowed is now significantly reduced to $4 million per calendar year.

How Does Approval of the Credit Work?

To obtain preapproval to claim the credit, taxpayers must apply in the tax year the property donation occurs by electronically submitting Form IT-CONSV-AP through the Georgia Tax Center. The taxpayer must have already completed the donation and must submit the State Property Commission’s determination and certification from the Georgia Department of Natural Resources along with their application. Once approved, the taxpayer will receive Form IT-CONSV detailing the amount of conservation tax credits they have been preapproved for, which should be attached to the taxpayer’s Georgia Income Tax Return every year the credit is claimed. The credit amount is limited to the lesser of $500,000 or 25% of the fair market value of the donated property in the year the donation occurred and is further limited to $250,000 per individual taxpayer. Applications are processed on a first-come-first-served basis, and once the $4 million dollar limit has been reached, the application will be denied and cannot be reconsidered for preapproval in another year.

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Contact Bennett Thrasher’s State and Local Tax experts for assistance with determining where your business may have sales tax collection requirements, tax exposure mitigation opportunities, property tax burdens and compliance considerations.

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