Tax Incentive Frequently Asked Questions
Q. What is the maximum amount a business can contribute?
Is there a minimum contribution amount?
A. There is no minimum contribution amount. The legislation created caps in order to limit fiscal impact to the State. The caps are $1.5 million in tax credits statewide, or $133,000 in tax credits per any one community. For businesses wishing to contribute in more than one community, there is a $250,000 cap.
Q. What organizations can participate in the program?
A. The DOR has established rules designating local Downtown Revitalization programs. BIDA has met the designation criteria requirements.
Q. How will BIDA use the funds?
A. The funds can be used for any purpose that is consistent with the overall goals of the organization and contribute to the revitalization of downtown.
Q. Is the credit $1 for $1?
A. No, the tax credit is 75% of the contribution.
Q. How does a business request the credit?
A. A business must be registered to file its state excise tax return(s) electronically in order to take advantage of the tax credit and may do so any time prior to applying for the credit. Go to the DOR website, www.dor.wa.gov and click on “E-file and Online Services”. Once a business is registered, they will be able to request the tax credit electronically through the DOR website. Keep in mind the tax credit request must be approved prior to making a contribution to a designated organization.
Q. Do businesses get to take the tax credit in the same year that it is approved?
A. No, a business may use the approved credit by reporting it on any excise tax return(s) filed during the calendar year following the year in which it was approved and contributed. However, in order for a business to use the full amount of the tax credit they are taking, they must have accrued a State B&O tax/PUT liability equal to, or exceeding the amount of the credit. A credit cannot be carried forward from year-to-year nor can a credit be refunded if the B&O tax/PUT liability is not equal to, or greater than, the credit amount approved for use in that year.
Q. Does a business need to reapply for the tax credit each year?
A. Yes. Applications will be accepted on a first come basis beginning January 1 of each year.
Q. Can a business spread out their contribution throughout the year?
A. Yes, as long as the entire contribution is given to the designated organization within the calendar year in which it was approved, and they receive a receipt each time they make a contribution “installment”.