The Conservation Easement Tax Expenditure: In Search of Conservation Value

Roger Colinvaux, Associate Professor of Law at The Catholic University of America, Columbus School of Law, and former Legislation Counsel with the Joint Committee on Taxation has published The Conservation Easement Tax Expenditure: In Search of Conservation Value, 37 Colum. J. Envtl. L.1 (2012).

Professor Colinvaux argues that a fundamental problem with the current conservation easement tax expenditure (the charitable income tax deduction under IRC § 170(h)) is that the measure for the tax benefit – lost economic development value – is erroneous. He argues that the measure for the tax benefit should be changed to one that better approximates conservation value. He also argues that serious consideration should be given to converting the deduction to a credit.

Some of the ideas for the tax credit Professor Colinvaux proposes include:

• Prioritization of conservation purposes, with conservation easements designed to protect ecosystems being eligible for the highest credit percentages.

• Making certain types of conservation easements ineligible for the new credit, such as façade easements that merely duplicate local law restrictions and conservation easements on golf courses (deductions for golf course conservation easements are already on the chopping block).

• Maintenance of the perpetuity requirement, in part, because conservation is undervalued by the private property system and “perpetual easements are like affirmative action for conservation; normal rules are switched off to redress a perceived land use imbalance in favor of development.”

• Suspension of a land trust’s ability to accept new credit-eligible donations if an audit of the organization reveals repeated failures to enforce easements or an unsustainable ratio of easements held to available resources.

• Availability of higher credit percentages for donations for which a publicly available “conservation appraisal” indicates good conservation outcomes, with factors of importance potentially including whether the state attorney general has unambiguous power to enforce conservation easements, whether there is a history of enforcement in the state, and whether the state has a public registry tracking easements.

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