Governor Ritter opposes tax amnesty for those that implemented conservation easements with inflated appraisals

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From the Associated Press (Steven K. Paulson) via The Aspen Times:

Ritter’s chief counsel, Trey Rogers, said the disputed credits total $100 million — money the state needs with a $1.5 billion budget deficit. Instead, the administration wants to settle each case individually…

State tax credits under the program jumped from $2.3 million in 2001 to $98 million in 2008, fueled in part by a change in 2003 that allowed the credits to be transferred and sold. A report last year by legislative analysts put total credits from 2000 to 2007 at $274 million. The Colorado Department of Revenue has notified 295 landowners and easement credit buyers that their credits were being disallowed because the easements were overvalued by state-licensed appraisers. It ordered them to pay the credits along with penalties and interest. The Internal Revenue Service reported last year that it had audited people, including buyers of easements, who claimed credits to which they weren’t entitled.

Rep. Wes McKinley, D-Walsh, said he plans to introduce a bill to grant amnesty for landowners with disputed credits, which he estimates at $300 million, including penalties and interest. “The state made a deal. It was a bad deal, but we need to honor the deals that we make,” McKinley said…

Nearly 300 landowners who face state action say they based their credit claims on land appraisals by unscrupulous brokers who offered to develop the land, in violation of state law. Landowners who sell credits to investors are stuck with indemnity clauses that require landowners to cover any losses — including demands for back taxes…

The state contends landowners should have known their property values — which the credits are based on — were inflated. John Swartout, executive director of the Colorado Coalition of Land Trusts, says he understands the naivete of some landowners. “They were used to farm subsidy programs that sometimes are too good to be true,” Swartout said…

Conservation groups say the dispute could provide ammunition to kill the program. Ritter wants to cut $13 million from the $52 million program over the first half of this year, and another $13 million for the fiscal year that begins in July. “It’s an incredibly effective tool to preserve Colorado’s ranch lands from unnecessary development,” said Pete Maysmith, executive director of Colorado Conservation Voters, a nonprofit advocacy group.

More conservation easement coverage here and here.

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