10/19

Tax Incentives In Other Industries

The United States is home to tremendous natural beauty, from the Grand Canyon to the New England coastline. Protecting these lands for future generations is incredibly important. Land conservation has successfully protected millions of acres of open space across the country, and continuing these efforts benefits all Americans.

That is why Congress updated the tax code in 2015 to make permanent an incentive that opens private conservation to a broader range of individuals. In fact, since 2005, the year prior to the current tax incentive’s introduction, more than 20 million acres of land have been conserved. The nationwide surge in conservation is a direct result of this incentive, which was passed with bipartisan Congressional support.

Current conservation easement legislation is a good example of Washington policy done right since it protects important and biodiverse green spaces and precious habitat forever. While no legislation is perfect, this easement legislation has been an incredibly successful and cost-effective way to spur private efforts to protect our country’s unique natural resources. It has led to more lands being conserved than ever before.

Nevertheless, there is some unfounded criticism being lodged towards some conservation easement donations, specifically those involving partnerships of unrelated individuals. This position is misguided. We shouldn’t turn back the clock on a conservation policy that is working as intended, and doing so would greatly diminish landowner incentives for choosing conservation over development or sale to a development company.

The federal, state and local governments use the tax code to incentivize a broad range of activities for economic, social and environmental benefits. Examples include:

  • Federal Tax Credits For Wind Energy “Meant To Keep Wind Energy Attractive For The Investors…” “Like other domestic energy sources, American wind power has benefited over the years from a stable, pro-growth tax policy. The PTC and the Investment Tax Credit (ITC) were meant to keep wind energy attractive for the investors who financed new wind farms as demand for clean energy sources continues to increase.” (American Wind Energy Association, Accessed 12/15/17)
  • States Provide A Variety Of Tax Incentives For Agriculture. “Incentives for agricultural activities across the states aim to preserve and promote farming and ranching. Some incentives attempt to help small farmers, such as Kansas’s credit for agritourism liability insurance and Nebraska’s credit for landlords who rent to beginning farmers. A few states use preferential excise tax rates or exemptions to develop wineries and breweries.” (Norton Francis, “State Tax Incentives for Economic Development,” Urban Institute, 2/29/16)
  • States Offer Generous Incentives To Technology Firms And Workers. “Twelve states and Washington, DC, provide high technology tax incentives; these range from a sales tax exemption for e-commerce in West Virginia to a comprehensive set of tax incentives for high technology companies in DC.” (Norton Francis, “State Tax Incentives for Economic Development,”Urban Institute, 2/29/16)
  • Almost Every State Has Incentives To Attract The Film Industry. “Over the past 15 years, 44 states have adopted targeted incentives for the film industry. Several states have structured the film credit as a refundable credit or rebate to film producers, unlike most tax incentives, which can only offset other taxes. These incentives vary from grants in DC and Georgia to fully refundable rebates in New Mexico. The credit is almost always refundable or transferable and exists even in states that have no income tax, such as Wyoming and Nevada, so film credits are essentially spending programs run through the tax code.” (Norton Francis, “State Tax Incentives for Economic Development,” Urban Institute, 2/29/16)

Incentives like those for wind energy programs are often praised. Yet, critics of conservation easements argue we should scrap the associated tax incentive due to rare instances of abuse. What they fail to note, however, is that the problem is not the tax incentive or ownership structure but valuation. Conservation efforts like ours would truly be hindered without the current tax incentive, and we should work to address limited instances of abuse but protect this valuable incentive.


Facebook
Comments Box SVG iconsUsed for the like, share, comment, and reaction icons