Portland City Council Greenlights Tax Incentive to Boost Downtown Business

The Portland City Council has unanimously approved a tax incentive aimed at retaining businesses in the city's downtown, Old Town, and Lloyd and Lower Albina districts. This credit, designed to reduce business license taxes, is available to companies with a minimum of 15 employees that sign or extend a lease for at least four years in the specified urban areas. To qualify, businesses must also ensure that their employees spend at least half their working hours in the city core. While the incentive caps at $250,000 per taxpayer, it's expected to be implemented for the 2023 tax year. City officials believe that even though smaller businesses might not directly benefit from the tax break, the increased foot traffic from larger businesses will indirectly boost their operations.

Andrew Fitzpatrick, the mayor's economic development director, and Andrew Hoan, president of the Portland Metro Chamber, both stressed the importance of the incentive in preventing businesses from leaving the city. Mayor Ted Wheeler and Commissioner Carmen Rubio, who played pivotal roles in formulating the measure, expressed optimism about its potential positive impact on the city's business landscape.

Key Highlights of the DBI Credit:

• Eligibility Criteria: 
• Sign a new or renewed lease during 2023 or 2024 for a minimum of four years or own and occupy a building within the eligible sub-districts.
• Retain a minimum of 15 employees who work at least half-time in the leased/owned building throughout the four-year duration.
  
  
• Credit Amount:
• Maximum credit per taxpayer: $250,000, spread equally over four years starting from the year of origin (either 2023 or 2024).
• The credit amount is the lesser of (in the year of origin):
• 100% of the City of Portland Business Tax liability
• 1% of City of Portland “income subject to tax”
• $30 per square foot of leased building space
  
  
• Additional Provisions:
• The city can set further limits on individual taxpayer credits if the total credits applied for surpass the $25 million DBI credit pool.
• Annual attestation is mandatory over the four-year credit period.
• Failure to meet requirements results in repayment of the credit with interest.

Read more at Portland approves downtown business tax break - Portland Business Journal (bizjournals.com)