What was Virginia's Land Preservation Tax Credit cap for calendar year 2013 after House Bill 1398?

Plain-English summary

Virginia fixed the Land Preservation Tax Credit cap at $100 million beginning with calendar year 2013. Earlier in 2013, the Department had announced an inflation-indexed cap of $113,909,000. House Bill 1398 removed the inflation adjustment, so the lower statutory amount controlled.

The bulletin also said that reissued credits—credits previously issued and later disallowed or invalidated—would no longer be added to the annual cap beginning in 2013.

Tax Bulletin 13-6 superseded Tax Bulletin 13-1. Its historical table showed the indexed cap rising from $100 million in 2007 to $111,054,000 in 2012 before returning to a fixed $100 million for 2013 and thereafter.

What this means for you

• The 2013 statewide credit pool was $100 million, not the higher amount announced in January 2013.
• The change affected the aggregate annual cap, not a statement that any particular donation qualified.
• This is historical guidance; confirm the cap and credit rules for the relevant year.

Common questions

Q: What cap had the Department announced before the law changed?
A: $113,909,000 for calendar year 2013.

Q: What cap replaced it?
A: $100 million.

Q: Were reissued credits added to the cap after the change?
A: No, beginning with calendar year 2013.

Citations and references

• House Bill 1398, 2013 Va. Acts ch. 798.
• Virginia Tax Bulletins 13-6 and 13-1.

Subject

Land Preservation Tax Credit revised cap for 2013

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 13-74

Original ruling text

TAX BULLETIN 13-6

Virginia Department of Taxation

MAY 22, 2013

IMPORTANT INFORMATION REGARDING

THE LAND PRESERVATION INCOME TAX CREDIT

REVISED CAP FOR CALENDAR YEAR 2013

New Cap Amount

On May 3, 2013, House Bill 1398 (Chapter 798, 2013 Acts of Assembly) became law. This legislation caps the Land Preservation Tax Credit at $100 million, beginning with the 2013 calendar year.

For Calendar Years 2007 through 2012, the Land Preservation Tax Credit was capped at $100 million, but was adjusted for inflation based on the consumer price index for all-urban consumers published by the United States Department of Labor (CPI-U). On January 25, 2013, the Department of Taxation (“the Department”) published Tax Bulletin 13-1 (Public Document 13-8, 1/25/13), which announced that the indexed tax credit cap for Calendar Year 2013 was $113,909,000. However, because House Bill 1398 removed the Land Preservation Tax Credit cap’s adjustment for inflation, the tax credit cap for Calendar Year 2013 and thereafter has been reduced to $100 million.

Under legislation enacted by the 2011 General Assembly, the indexed tax credit cap must be increased by the amount of reissued tax credits that were previously issued but subsequently disallowed or invalidated by the Department. Under House Bill 1398, reissued tax credits will not be added to the $100 million tax credit cap, beginning with the 2013 calendar year.

The following chart depicts the growth in the CPI-U from 2006 through 2012. It also shows the amount of the tax credit 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

2013 and thereafter

$100,000,000

If you have additional questions, please visit the Department’s website at www.tax.virginia.gov , or contact the Tax Credit Unit at (804) 786-2992.

This Tax Bulletin supersedes Tax Bulletin 13-1 (Public Document 13-8, 1/25/13).

Related Documents

13-1

13-1