Bill
HB 3457
The bill creates an Illinois income tax credit equal to the fair market value of qualified conservation donations, capped at $200,000 per taxpayer.
Status snapshot
- Introduced: Feb 18, 2025 by Rep. Will Guzzardi (filed Feb 27, 2025). Co‑sponsors added: Reps. Michelle Mussman, Laura Faver Dias, Maura Hirschauer, Hoan Huynh. Companion: SB 1926.
- Committees: Referred to Rules, Revenue & Finance, Tax Policy subcommittee; reported favorably without amendment (5/9/2025); placed on General State Calendar (5/15/2025).
- Statutory placement: Adds Section 235 to the Illinois Income Tax Act (35 ILCS 5/235 new).
Purpose
- Encourage private landowners to protect land for conservation, open space, historic resources, habitat and watershed protection by creating an income tax credit for qualifying donations of real‑property interests to public or private conservation entities.
- Complement existing state conservation and farmland preservation statutes and leverage private donations to advance public conservation goals.
Key provisions
- Tax credit: For taxable years beginning on or after Jan 1, 2025, taxpayers may claim a credit equal to the fair market value of a “qualified donation” of a qualified real property interest conveyed for conservation/preservation purposes, subject to a per-taxpayer cap of $200,000.
- Credit use limits: The credit in any single year cannot exceed the taxpayer’s Illinois income tax liability for that year. Unused credit may be carried forward for up to 20 consecutive tax years.
- Qualified real property interests: Fee simple, remainder interests, or perpetual use restrictions that meet 26 U.S.C. §170(h)(2)(c) requirements.
- Qualified donation requirements: Gifts or conveyances to governmental bodies or eligible nonprofit conservation agencies (including accredited land trusts) that secure conservation restrictions in perpetuity (recorded in county real property records or other mechanisms established by rule).
- Documentation: Donations must be substantiated by an appraisal prepared by a “Qualified Appraiser” consistent with federal appraisal rules (26 CFR 1.170A‑17).
- Pass‑through entities: Credits arising from donations made by trusts, estates, partnerships, LLCs, S corporations, or other fiduciaries are to be used either by the entity (if it is the taxpayer) or allocated to members/partners/shareholders/beneficiaries proportionally to their pass‑through interests; credit cannot be claimed by both the entity and its owners for the same donation.
- Transferability: Taxpayers may transfer (sell) unexpended credits, in whole or part, to other taxpayers for consideration. Transfers and reporting procedures are to be established by rule and must be notified/filed with the Department of Revenue.
- Exclusivity: A taxpayer claiming this credit may not claim another similar tax credit for costs related to the same project.
- Rulemaking: Directs the Illinois Department of Natural Resources (DNR) and Department of Revenue (DOR) to adopt implementing rules and criteria.
Who is affected
- Private landowners who donate conservation interests; conservation organizations and accredited land trusts receiving such donations; taxpayers who may purchase or receive transferred credits; pass‑through entities and their owners; DNR and DOR (for rulemaking and administration); and state revenues (tax expenditures).
Potential impacts and issues to consider
- Incentivizes permanent land conservation by reducing donor tax burden and potentially creating a market for transferable credits.
- Fiscal impact: likely creates a state tax expenditure (reduced income tax receipts), magnitude depends on credit uptake and transfer market; fiscal analysis would be required.
- Administrative requirements: appraisals, recorded restrictions, and DNR/DOR rules will determine eligibility and compliance burden.
- Interaction with federal charitable deduction rules (IRS appraisals and substantiation) and with existing Illinois conservation programs must be carefully coordinated to avoid double‑benefiting the same project.
Note: Text in the draft is partially truncated in the provided document; final bill language and administrative rules will clarify technical definitions, transfer procedures, and enforcement.
Compiled from official sources — confirm details with the bill’s official record.
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