Resources for Buyers
What are conservation easements?
Conservation easements are agreements between landowners and a qualifying organization that restrict development of real property. These documents vary and are unique for each landowner. They are used to preserve land in perpetuity and they are designed specifically to protect the conservation values of a property, such as wildlife habitat, agricultural lands, outdoor recreation areas for the public, scenic vistas or historic lands or structures.
What are conservation easement tax credits?
Donors of either land or a conservation easement are eligible for conservation tax credits under New Mexico law. You can use these conservation tax credits against your personal, corporate, or fiduciary income tax liability imposed by either the Income Tax Act or the Corporate Income and Franchise Act. Conservation tax credits may be used by the donor over a 20 year period and/or transferred to other New Mexico taxpayers.
What are the benefits of buying a credit?
Buyers can save thousands of dollars by purchasing conservation tax credits. For example, if a Buyer buys $100,000 in tax credits at the 87% rate, the Buyer will pay $87,000 and save $13,000. Buyers will also encourage land conservation by providing a market for farmers and ranchers and other landowners to sell their credits.
Who can purchase a credit?
Any New Mexico taxpayer who files a New Mexico tax return such as a New Mexico residents, C corporations, trusts, estates, partnerships, and limited liability companies may purchase conservation tax credits. For members of pass through entities, the credit may be claimed by the entity or the members, managers, partners, shareholders or beneficiaries.
What is the smallest tax credit I can buy or sell?
Tax Credit Connection, Inc. will assist with transfers of credits in minimum values of $10,000.
Is there a limit on the amount of credits that can be purchased in a tax year?
No. Purchasers may purchase as many credits as they wish. Any unused amounts of credits can be carried forward for 20 years.
When can I buy a credit?
You can buy credits at any time up to December 31 to be used against that taxable year. For example, credits to offset 2015 taxes have to be purchased by December 31, 2015. The earlier you register, the better are the chances you will get credits by the end of the year.
What happens if I buy too many credits?
Any unused amounts of credits can be carried forward for 20 years. Credits may not be resold.
Do I need to own land in the state of New Mexico to purchase conservation tax credits?
No. Buyers do not need to own land in the state of New Mexico to purchase conservation tax credits. Any taxpayer who files a New Mexico personal or corporate tax return such as New Mexico residents, corporations, trusts, estates, partnerships, and limited liability companies may purchase conservation tax credits.
What taxes can the conservation tax credits offset?
Buyers may use conservation tax credits against their state of New Mexico personal, corporate, or fiduciary income tax liability by either the Income Tax Act ot the Corporate Income and Franchise Act.
What am I exactly purchasing?
Buyers are purchasing a transferrable state tax credit. Basically, it is similar to purchasing a gift certificate that can be used dollar to dollar against your New Mexico state income tax bill for the year that you purchased the credit or future years. The credits may not be used against back taxes owed to the state of New Mexico.
What is my risk?
For landowners (donors) to earn tax credits from their conservation donation, there is a three step review process through the state of New Mexico. The Energy, Minerals, and Natural Resources Department must certify of the eligibility of credits while the Taxation and Revenue Department must approve the credits. In addition, Staff of Tax Credit Connection, Inc. thoroughly reviews all tax credits before selling them, thereby finding and solving problems before they become issues. Finally, the Seller of the tax credits guarantees the credits, which means if any credits are disallowed for any reason, the Seller will pay the Buyer back for any disallowed credits, interest, penalties and reasonable attorney and accounting fees.
How do I register?
Simply download the appropriate forms from our registration page, fill them out and return to Tax Credit Connection, Inc.