Do Virginia’s conservation easement tax credits work? 

That depends, according to a June 2021 report released from the Virginia Office of the State Inspector General investigating the quality of land conservation achieved by easements supporting tax credits. 

In particular, the audit discovered that Virginia receives lower quality conservation for easements supporting tax credits between $500,000 and $999,999 when compared with easements resulting in tax credits of $1 million or more. 

The discrepancy exists because taxpayers are taking reduced credits on easements to avoid crossing the $1 million threshold, which triggers a review by the Virginia Department of Conservation and Recreation (DCR).  

To increase the quality of conservation, OSIG recommends that land trust companies holding easements or land donations should be accredited by the Land Trust Alliance, and that the Code of Virginia be amended to reduce the threshold for quality reviews by DCR. 

Check out more from the audit in the OSIG’s full report.