Tax Credit Incentive Helps Washington’s Main Street Communities

Strategy: Balance Your Budget, Serve Local Community

Type of attraction: Main Street/Community

Summary: Businesses usually don’t look forward to paying taxes, but a program developed by the Washington State Main Street Program makes the obligation more appealing as it helps revitalize downtowns across the state.

   

Businesses usually don’t look forward to paying taxes, but a program developed by the Washington State Main Street Program makes the obligation more appealing as it helps revitalize downtowns across the state. “We have 11 certified Main Street Programs and more than 80 affiliates in Washington,” says Sarah Hansen, Washington State Main Street program manager. “Many of them are struggling in a difficult economy to raise funds to support their organizations. The tax incentive program is a way for businesses to redirect their taxes back to their own community.”

The State of Washington requires businesses to pay a Business and Occupation Tax (B&O). Through state legislation, the Main Street Tax Incentive Program allows businesses submit a donation request for approval by the Washington State Department of Revenue.

The legislation also requires that downtown organizations receiving contributions must be a part of the state’s Main Street Program. Eligible communities can receive up to $133,333 each year to support the organization’s activities.

“Once the request is approved, businesses can direct that their tax payment go to the downtown revitalization organization of their choice,” Hansen explains. “With a donation through this program, the business gets a tax credit worth 75% of the contribution. Or they can donate to the Main Street Trust Fund – to support the program statewide - and receive a 50% tax credit.” Businesses can also choose to donate to both a local organization and the statewide trust fund up to $250,000.

“Also, if the downtown organization is a federally-registered 501c3, the business may also be eligible for a federal income tax deduction as a charitable contribution,” Hansen says.

Since the program’s inception, Main Street Programs such as the one in Port Townsend have seen tremendous support from local businesses. More than 20 businesses including banks, retail and restaurants have participated. The funds received by the Port Townsend Program have allowed the organization to undertake a variety of activities including landscape enhancements for a local park, creation of a new website and e-newsletter and hiring part-time administrative staff.

For more information, contact Sarah Hansen, shansen@wa-trust.org; 206-624-9449.