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December 12, 2013

Land Conservation Tax Incentive Expiring Dec. 31

"It’s one of the ways we conserve our horse lands," said Holly Groshek, acting executive director of ELCR, about the land conservation tool for the equestrian industry set to expire Dec. 31. Photo by Kat Netzler.

A land conservation tool for the equestrian industry is set to expire on Dec. 31. Two public bills, established in 1986 to grant landowners an enhanced tax deduction if they donated conservation easements to protect sizable tracts of open space, will be discontinued. 

The bills in question are H.R. 2807, “a bill to amend the Internal Revenue Code of 1986 to make permanent the special rule for contributions of qualified conservation contributions,” and S. 526, “a bill to amend the Internal Revenue Code of 1986 to make permanent the special rule for contributions of qualified conservation contributions, and for other purposes.”

Ben Pendergrass, legislative director of the American Horse Council, noted that these aren’t the only tax provisions set to expire on the same date. “Tax provisions concerning certain businesses, charitable giving, depreciation on motor sport speedways and others are expiring this year too,” he said.

The issue of extending the bills is monetary.

“Congress hasn’t been very enthusiastic to act on them because to extend all of the retiring provisions would cost about $1 trillion altogether,” Pendergrass said.

The extension of the land conservation tax incentive alone would cost approximately $300 million.

Equine Land Conservation Resource, a non-profit organization dedicated to preserving land use for horse-related activities, is strongly in favor of keeping the tax incentive alive. According to the ELCR, the enhanced tax incentive for landowners who permanently retire development rights on their land is one of the most cost-effective preventative measures against losing open space, and it helps farms and family land businesses remain profitable, or at least viable.

“It’s an ongoing issue,” said Holly Groshek, acting executive director of ELCR. “We’ve worked with the Land Trust Alliance; they’re sort of the umbrella organization that oversees a lot of the local land trusts—these are the ones that typically hold easements—and they’ve asked us to help as a partner because this issue is very important to our equine community. It’s one of the ways we conserve our horse lands.”

ELCR has rallied support in the form of co-sponsors to continue the tax incentive into 2014. However, Pendergrass noted that “the House [of Representatives] is going home after [Dec. 12]; they’re done for the rest of the year. The first opportunity to extend most or any of the expiring tax provisions will be next year, if Congress does a big tax reform bill. It’s unclear if and when that will happen, though.”

Most of these tax provisions were set to expire in 2012 and were already extended for one year through 2013. “That’s not likely to happen again,” said Pendergrass. “I don’t see a scenario where they would be extended.”

Groshek acknowledged that there will be a time gap between Dec. 31 and the tax incentive being revitalized, but ELCR will continue rallying support in favor of the tax incentive.

“We will continue to work on it in January,” she said. “We’ll work toward at least extending it, if not making it permanent. One of the reasons for making it permanent is so that if I had a farm, for example, and I wanted to put a conservation easement on it, I wouldn’t have to worry after I made that decision and went through all the hoops and invested the time to get it done. I would [be assured that I] have a permanent tax incentive.

“We’re reaching out to the equine community,” Groshek continued. “People can help by contacting their local representatives and senators and asking them to co-sponsor the bills.”