Ezel / Tax Rulings / VA
VA P.D. 10-257 Land Preservation Tax Credit 2010-11-15

What annual cap applied to Virginia Land Preservation Income Tax Credits issued during calendar year 2011?

Short answer: Virginia set the calendar-year 2011 Land Preservation Income Tax Credit cap at $108,424,000. Under the statutory CPI-U formula, the Department calculated that the relevant 12-month average had risen about 8.4% from the 2006 base period. The amount is historical and does not state the cap for later years.

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This page answers the general question as of 2010. Ezel answers yours, under current Virginia tax law, with citations.

Currency note: this ruling is from 2010
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Virginia Department of Taxation Tax Bulletin dated November 15, 2010, not a taxpayer-specific ruling. It announces the Land Preservation Income Tax Credit cap for calendar year 2011 and is historical only; use current Department guidance for another year and confirm whether later legislation changed the program. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
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Subject

Land Preservation Tax Credit

Plain-English summary

Virginia's calendar-year 2011 cap for Land Preservation Income Tax Credits was $108,424,000. The underlying law began with a $100 million annual cap and required an inflation adjustment based on the Consumer Price Index for All Urban Consumers.

The Department calculated that the average CPI-U for the 12 months ending August 31, 2010 was about 8.4% higher than the corresponding 2006 base period. Applying the statutory formula produced the 2011 cap. The bulletin also listed the historical caps for 2007 through 2010.

What this means for you

  • The $108,424,000 figure applied to credits issued during calendar year 2011.
  • It was a statewide annual issuance cap, not a statement that one taxpayer could claim that amount.
  • The cap changed with inflation under the formula in Va. Code § 58.1-512(D)(4)(b).
  • This bulletin is historical; later-year transactions require the cap and law for the relevant year.

Historical cap table

Calendar year CPI-U increase over 2006 base Credit cap
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

Citations and references

  • Va. Code § 58.1-512(D)(4)(b).
  • House Bill 5019, Chapter 4, Special Session I of 2006, as identified in the bulletin.

Source

Original ruling text

TAX BULLETIN 10-11
Virginia Department of Taxation

November 15, 2010

IMPORTANT INFORMATION REGARDING

THE LAND PRESERVATION INCOME TAX CREDIT

New Cap Amount

House Bill 5019 (Chapter 4, Special Session I of 2006) made several changes to the Land Preservation Tax Credit. One of these changes established a $100 million cap on the amount of total credits that may be issued by the Department of Taxation (“TAX”) during a calendar year.

In addition, the legislation provided a mechanism by which this cap may be increased because of inflation. Under Va. Code § 58.1-512 D 4b, beginning with calendar year 2008, the $100 million cap must be increased by an amount equal to $100 million multiplied by the percentage by which the consumer price index for all-urban consumers published by the United States Department of Labor (CPI-U) for the 12-month period ending August 31 of the preceding year exceeds the CPI-U for the 12-month period ending August 31, 2006.

For example, for Calendar Year 2010, the average CPI-U for the 12-month period ending August 31, 2009 increased by approximately 6.8 percent over the average for the 12-month period ending August 31, 2006. Therefore, for calendar year 2010, the cap was $106,845,000.

Using information obtained from United States Bureau of Labor Statistics, the average CPI-U for the 12-month period ending August 31, 2010 increased by approximately 8.4 percent over the average for the 12-month period ending August 31, 2006. As a result, the cap for the Land Preservation Income Tax Credit will be increased to $108,424,000 for calendar year 2011.

The following chart depicts the growth in the CPI-U from 2006 through the applicable year for each year that the $100,000,000 has been increased. It also shows the amount of the 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

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

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