Tax Policy Structures for Incentivizing Reforestation of Abandoned Agricultural Lands in New York State

Abstract

We examine the potential for incentivizing reforestation of abandoned agricultural lands in New York State through two tax policies: a property tax exemption and an income tax credit. We compare the incentivization structures of both policies by simulating net benefits to landowners and total costs per county. Ultimately, we find that the income tax credit incentivizes landowners more efficiently than the property tax exemption. The motivation for exploring property tax exemptions follows the New York State Climate Action Council’s 2021 Draft Scoping Plan, which considers creating Real Property Tax Law 480c to incentive landowners to pursue carbon sequestering land management practices. The Draft Scoping Plan also considers the revisioning of the 480a Forest Tax Law program for forest management carbon sequestration. In this paper, we simulate Real Property Tax Law 480c with an incentivization structure mirrored on the active 480a Forest Tax Law program.

Keywords: reforestation, incentives, abandoned farmland, abandoned agricultural lands, New York State, property tax exemption, income tax credit, landowners, Climate Action Council, CLCPA, Climate Leadership and Community Protection Act, Climate Policy, Climate Change, 480a Forest Tax Law