Representatives of the Kent Downtown Partnership will head to Olympia on Jan. 25 in an effort to get legislators to increase the state cap on the Main Street business and occupation tax incentive program.
KDP executive director Barb Smith, president Randall Smith and past president Greg Haffner will ask legislators to boost the cap, according to a KDP email. KDP is a nonprofit group that promotes downtown businesses.
The state cap is $1.5 million. This total used to be shared by 13 cities when the program first started; now there are 35 cities sharing that same pot of money, according to the KDP. Cities have an individual cap as well.
Under the program, Kent businesses can keep their tax dollars local by registering their intentions with the state and getting a tax credit for their B&O contribution the following year.
If a company donates $10,000 to KDP in 2017, it can get a 75 percent tax credit on the donation in 2018.
KDP says the cap needs to go up because more cities are participating in the program so organizations have had to dramatically scale back their budgets. Last year, KDP lost out on approximately $60,000 of funding because of this cap. Other businesses in other cities registered before Kent businesses could, giving them access to funds that could have gone to KDP.
In the past, a business could take all year to register because demand on the Main Street tax incentive program was low. Now that the program is so successful, however, many more businesses across the state are participating and the state cap is being met in January. In fact, this year, the cap was met before 6 a.m. on Jan. 1.
KDP was able to get just more than $126,000 this year (just shy of KDP’s annual cap of $133,333) because Kent businesses stayed up past midnight on New Year’s Eve to register after the clock struck midnight. If they’d waited until morning, the critical funding available through the program would have been gone.
“There is a great deal of pressure put on individual cities to get their businesses to register first,” Barb Smith said. “The competition to get this done between communities is unhealthy. All the communities throughout the state that are providing revitalization efforts for their historic downtowns all deserve their fair share of the allotment available through the program.”
To learn more about Washington’s Main Street tax credit program, visit the Department of Archaeology & Historic Preservation website.
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