Business tax incentive program still in info stage

MLBA can receive up to $100,000 for city's downtown revitalization

MOSES LAKE — A state-funded tax incentive for businesses to donate funds for community renovation is still in the early stages.

In December, the Moses Lake Business Association was designated eligible to participate in the new Main Street Tax Credit Incentive Program.

With prior approval of the Washington Department of Revenue via E-File, a company may donate up to $100,000 for revitalization of downtown Moses Lake and receive a 75 percent tax credit on 2007 business and occupation taxes.

"This is a way to have businesses contribute to downtown revitalization efforts throughout the state, and leverage their money through their B&O tax payments to the state," explained Jacie Daschel, MLBA board member.

So far, she said, 14 cities have been approved or have organizations which were approved for receiving money through the tax credit program. Each city may receive up to $100,000 in tax credits.

Daschel said the program may hopefully continue in future years so even small business owners can contribute whatever they feel, and leverage their B&O tax.

"Because every business, pretty much, in the state of Washington, pays B&O tax," Daschel said. "What (the program) does is it gives that 75 percent leverage on your money, so a $10,000 donation only really costs you $2,500."

Seventy-five percent returns to the company in the form of a tax credit in 2007, but the community realizes the whole $10,000, Daschel and MLBA Director Sally Goodwin said.

"It's a really great way to leverage moneys that we pay as business people to a tax that isn't the favorite tax in the world," Daschel said. "It's one of our least favorite taxes."

The money goes into two basic funds, an operating fund and a capital fund.

The operating fund deals with all aspects of the association's operations to promote downtown, many of which are ongoing or growing, such as developing design guidelines and providing support for business recruitment and retention.

The capital fund enables businesses "who really need to latch on to capital improvement, bricks and mortar," Daschel said, a way to participate in the city's revitalization of Sinkiuse Square and Third Avenue by contributing to building of the interactive fountain.

If, as a community, enough private moneys are put in, Goodwin said, maybe enough money would be raised to build the entire interactive fountain, freeing up that much money for the city to put in someplace else or go that much further in redevelopment.

Daschel and Goodwin said they hope to reach the total $100,000 maximum this year. So far, Discovery Ford and Honda, where Daschel is owner with her husband, is the one identified contributor. Daschel said she wanted to test out the system, and called the steps a simple, two-minute process.

Daschel and Goodwin said they have only just started sending out letters and meeting contacts face-to-face, and are beginning to receive responses, although most are in the initial stages of the process.

"It's not something one person's going to say, 'I'm going to contribute $50,000 to that,'" Goodwin said. "They have to take that to a board."

Major donors — those paying significant amounts of B&O taxes and community-minded — have been identified.

"We've gone to the Moses Lake businesses at this point," Goodwin said, noting that there's more to do.

Daschel said the goal is to have the $100,000 in place by April. She noted there is some urgency involved in reaching that number, because cities are still applying for the tax incentive program, but a total of $1.5 million has been set aside by the state. If the state approves more, then the money goes to the first cities which receive their maximum amounts, possibly meaning less moneys available to those cities remaining. Once the $1.5 million is gone, the program is over. Some cities have already reached the maximum, Daschel added.

"This program will be ongoing unless for some reason our state legislatures decide they're going to pull the money," Goodwin said, noting that businesses have to re-apply each year, but the association does not as a recipient, save for a major change within the organization's structure.

"It's a wonderful way to leverage our investment in our downtown," Daschel said. "And we've never had this opportunity before, to do something like this, where we can leverage 75 percent of the money coming from a tax that we had to pay anyway."

For more information, call Goodwin at (509)764-1745 or Daschel at (509)765-4551.