Conservation Tax Credit Program Overview

Why do we have a Conservation Tax Credit?

North Carolina recognizes the importance of land conservation to its economy, and offers a tax credit program to promote conservation of ecosystem functions (fish and wildlife conservation and conservation of natural areas), ecosystem services (farmland conservation) and other public benefits (public access to public trails, waters, and beaches).

The N.C. Conservation Tax Credit Program, established as GS 113A-231, as well as GS 105-130.34 and 151.12 exists as an incentive for private landowners to voluntarily conserve their land. When a landowner donates a conservation easement or fee simple deed to a qualified recipient, they may receive a tax credit to apply against their state income taxes. The N.C. Department of Environment and Natural Resource’s responsibility is to certify that the donation results in one or more of the public conservation benefits required by statute.

Donations must serve a public benefit that is useful for:

• Public beach access or use,
• Public access to public waters or trails,
• Fish and wildlife conservation,
• Forestland or farmland conservation,
• Watershed protection,
• Conservation of natural areas as that term is defined in G.S. 113A-164.3(3),
• Conservation of natural or scenic river areas as those terms are used in G.S. 113A-34,
• Conservation of predominantly natural parkland, or
• Historic landscape conservation

Tax Credit Details

The N.C. Conservation Tax Credit is equal to 25 percent of the fair market value of interest in real property donated for conservation purposes, per G.S. 105-151.12 for individuals and G.S. 105-130-34 for corporations.

• Up to $250,000 for individuals
• Up to $500,000 for corporations, pass-through entities, or married couples filing jointly
• It may be carried forward for up to five years.
• The credit is non-transferable.
• Land dedicated under local government regulation or ordinance, or dedications made to increase building density levels are not eligible.
• Qualifying for federal deductions under Section 170(h), or receiving funds from state granting programs does not automatically qualify a donor for state credit.

Who would be a Qualified Recipient?

• State government
• Local government
• Qualified non-profit organization, incorporated to receive and administer land for conservation purposes and receive charitable contributions under G.S. 105-130.9

Recent legislation (Session Law 2010-167, House Bill 1829) clarifies the conservation tax credit’s requirement for conservation in perpetuity. The interest in real property must be “donated in perpetuity for one of the qualifying uses listed in this subsection and accepted in perpetuity for the qualifying use for which the property is donated…” The expectation is that qualified recipients will meet this obligation through their commitment to protect the conservation purposes of the donation, and maintaining the resources to enforce restrictions and defend the conservation property.

The new legislation is changing how applications are reviewed. Please read the link below to learn how donors and recipients can comply with the new legislation. Donors and recipients are encouraged to contact the Conservation Tax Credit program with questions.

2010 Changes to North Carolina Conservation Tax Credit

Certification Review Process

The N.C. Department of Justice and the N.C. Department of Environment and Natural Resources both review Conservation Tax Credit applications. To determine if the donation will receive certification, DENR reviews applications with two questions in mind:

1. Does the donation provide one or more of the public benefits listed above?
2. Does the instrument of transfer adequately protect/conserve public benefit(s)?

The review process generally takes between six and eight weeks.

Conservation Tax Credit Program HOME