Division of Conservation: About Tax Credit Certificates

Conservation Easement Tax Credit Certificates

A conservation easement is a voluntary legal agreement to restrict use of a property. Typically, development is limited or prohibited in order to forever protect and preserve conservation values, such as natural habitat, open space scenic views and agriculture, and outdoor recreation and education. The conservation easement is recorded in the public record and is enforced by the holder of the conservation easement.

A tax credit certificate is a document issued by the Division of Conservation that allows a landowner who donated a conservation easement to claim a tax credit on their state income tax. The tax credit is not a tax deduction, but rather a dollar-for-dollar reduction of state income tax liability. Moreover, the tax credit certificate is transferable and can be sold. Since 2015, tax credit certificates are issued for 75% of the first $100,000 of donated value and 50% of any remaining donated value up to a maximum of $5 million per donation. Credits in excess of $1.5 million are issued in increments of up to $1.5 million per year in future years.

The tax credit certificate application process ensures that conservation easement donations meet the requirements of a qualified conservation contribution under section 170(h) of the Internal Revenue Code and are supported by a qualified appraisal prepared by a qualified appraiser. Importantly, the qualifications of donations are assessed before a tax credit certificate is issued. As a result, the risk of the tax credit ever being disputed is greatly minimized, however the issuance of a tax credit certificate by the Division does not restrict the authority of the Department of Revenue to reject a tax credit claim based upon tax compliance matters. 

The authority to approve or deny tax credit certificate applications is vested with the Conservation Easement Oversight Commission and the Director of the Division of Conservation. Examinations must be completed in 120 days. Please see the fees page for the current tax credit certificate application fee.


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