Section 38AA Credit against taxes imposed for qualified donation of certified land to public or private conservation agency
[Text of section effective for tax years beginning on and after January 1, 2011. See 2008, 509, Sec. 4.]
Section 38AA. (a) As used in this section, the following words shall have the following meanings:-
“Bargain sale”, the sale of an interest in real property by a taxpayer at a cost below appraised market value, when a portion of the value of the interest in real property is a qualified donation, as such terms are defined herein, and which meets the requirements of section 1011(b) of the Internal Revenue Code of 1986, as amended.
“Certified land”, an interest in real property, the donation or bargain sale of which has first been determined by the secretary of environmental affairs to be in the public interest for natural resource protection including, but not limited to, drinking water supplies, wildlife habitat and biological diversity, agricultural and forestry production, recreational opportunities or scenic and cultural values; provided, however, that the secretary of environmental affairs shall assure that all certified lands are protected in perpetuity.
“Interest in real property”, any right in real property in the commonwealth, with or without improvements thereon, or water, including, but not limited to, fee simple, life estate, restriction, easement, covenant, condition, partial interest, remainder, future interest, lease, license, mineral right, riparian right, or other interest or right in real property that may be conveyed concerning the power to transfer property.
“Public or private conservation agency”, the commonwealth, or any subdivision thereof, or any municipality, or private nonprofit corporation organized for the purposes of land conservation, which is authorized to do business in the commonwealth, and which has tax-exempt status as a nonprofit charitable organization as described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended.
“Qualified donation”, a donation, or the donated portion of a bargain sale, made in perpetuity of a fee interest in real property or a less-than-fee interest in real property, including a conservation restriction, agricultural preservation restriction or watershed preservation restriction, pursuant to chapter 184, provided that such less-than-fee interest meets the requirements of qualified conservation contributions under section 170(h) of the Internal Revenue Code of 1986.
“Taxpayer”, a taxpayer subject to the income tax under this chapter.
(b) A taxpayer making a qualified donation of certified land to a public or private conservation agency shall be allowed a credit against the taxes imposed by this chapter. The credit shall be equal to 50 per cent of the fair market value of the qualified donation. The amount of the credit that may be claimed by a taxpayer for each qualified donation shall not exceed fifty thousand dollars.
(c) The fair market value of certified land shall be substantiated by a qualified appraisal, as defined in United States Treasury Regulation section 1.170A-13(c)(3), and shall be prepared by a Qualified Appraiser, as defined in United States Treasury Regulation section 1.170A-13(c)(5). For any taxpayer to qualify for the credit provided for in subsection (b) of this section, the taxpayer shall at the same time as the taxpayer files a return for the taxable year in which the credit is claimed, file with the department a summary of a qualified appraisal or, if requested by said department, the taxpayer shall submit the appraisal itself.
(d) In any one tax year the credit used may not exceed the amount of tax liability otherwise owed by the taxpayer. The tax credit shall be taken against the taxes imposed under this chapter and shall not be refundable. Any amount of the credit that exceeds the tax due for a taxable year may be carried forward by the taxpayer to any of the 10 subsequent taxable years.
(e) Any tax credits issued in accordance with this section may be in addition to any charitable deductions claimed on the taxpayer’s federal income tax return for the same qualified donations of certified lands.
(f) Any taxpayer claiming a state income tax or excise tax credit under this section may not claim an additional state income tax credit or deduction during any one tax year for costs related to the same interest in certified lands.
(g) Any tax credits which arise under this section from the qualified donation of certified land by a pass-through tax entity such as a trust, estate, partnership, corporation, limited partnership, limited liability partnership, limited liability corporation, subchapter S organization, or other fiduciary, shall be used either by such entity in the event it is the taxpayer on behalf of such entity or by the member, partner, shareholder, or beneficiary, as the case may be, in proportion to its interest in such entity in the event that income, deductions, and tax liability passes through such entity to such member, partner, shareholder, or beneficiary. Such tax credits may not be claimed by both the entity and the member, partner, shareholder, or beneficiary, for the same conveyance.
(h) The secretaries of energy and environmental affairs and of administration and finance, acting jointly and in writing, shall authorize tax credits under this section together with subsection (p) of section 6 of chapter 62 in a cumulative amount, including the current year cost of credits allowed in previous years, that shall not exceed $2,000,000 annually. No credits shall be allowed under this section except to the extent authorized as provided in this subsection. The commissioner of revenue, after consulting those secretaries concerning, among other things, the land conservation objectives of this section, shall adopt regulations governing applications for and other administration of these tax credits.