The Portland City Council adopted the Downtown Business Incentive (DBI) credit program—Ordinance 191451—on September 14, 2023. The DBI program has allocated up to $25 million in temporary, non-refundable tax credits against Portland’s business license tax (BLT) for 2023 and 2024.
Who Is Eligible?
Businesses located within Portland sub-districts of Lower Albina, Lloyd, Downtown, or Old Town/Chinatown that have signed or extended a commercial lease during 2023 and 2024. Businesses located within these areas that were previously operating before 2023, and still operating today, are also eligible.
What Is the Benefit?
A maximum non-refundable credit of up to $250,000 against the City of Portland’s BLT (2.6% of adjusted net income).
How Does Portland Determine the Maximum Credit Amount?
The maximum credit amount per business is limited to the lesser of 1% of the City of Portland’s “income subject to tax” shown on the business’s tax return in the year of origination (2023 or 2024) or $30 per square footage of building space covered in the lease or building space used by a building owner’s staff in the eligible sub-district.
For example, Business A reports “income subject to tax” of $1 million. Of this amount, 1% is equal to $10,000. Business A also leases a 1,500 square foot space. Of this amount, $30 per square foot is equal to $45,000. Thus, Business A would be eligible for a $10,000 non-refundable credit.
What Does Portland Require of Each Business Awarded a Credit?
Businesses that apply and receive an award must maintain and attest to 15 or more employees physically spending 50% or more of their time within the owned or leased space over a four-year period from the date of origination (2023 or 2024). If the business fails to maintain the employees over the four-year period, any credit previously claimed must be repaid with interest.
How and When Do I Apply?
Applications for 2023 and 2024 are due by January 31, 2024 and January 31, 2025, respectively. If you are interested, please reach out to the Ryan professionals listed below to discuss this opportunity.
TECHNICAL INFORMATION CONTACTS:
Matt Lowell
Principal
Ryan
321.251.2924
matt.lowell@ryan.com
Austin Arnold
Manager
Ryan
380.710.9686
austin.arnold@ryan.com
The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.