Portland City Council adopted the Downtown Business Incentive (DBI) credit program on September 14, 2023 (Ordinance 191451).
This ordinance is allowing businesses in certain sub-district to claim a Downtown Business Incentive credit against the business license tax.
The Downtown Business Incentive credit program is a $25 million temporary nonrefundable tax credit designed to incentivize commercial lease signings and lease renewals that will contribute significantly to the recovery and revitalization of Portland’s central city. This program will retain and support future investments from a variety of central city tenants that drive job creation, pay taxes, and generate economic activity throughout the City’s core.
An analysis conducted by EcoNorthwest demonstrated that four sub-districts were hardest hit in terms of reduced employment and foot traffic. The four sub-districts identified for this credit program are:
- Lower Albina;
- Downtown; and
- Old Town/China Town.
**See at the bottom of this article for further clarification on the sub-districts eligible for this credit.
When is the credit available?
The one time credit is available in either 2023 or 2024. The credit is divided and taken equally over four years. The credit is allowed in each tax year and cannot exceed the amount of tax owed.
How does a taxpayer qualify?
In order to qualify for the credit the taxpayer must:
- enter into a new lease or extend a current lease during 2023 or 2024 for building space in an eligible sub-district for a period of four years or more; or
- own and occupy a building space in the eligible subdistrict.
Further the taxpayer must:
- maintain at least 15 employees with each employee working at least half their time in the leased or owned building;
- if leased building space, a lease/extension entered into in 2023 may be used to calculate the credit on either the 2023 or 2024 return; and
- if leased building space, an extended lease must be extended from the end date of an existing lease.
What is the amount of the credit?
The maximum credit is $250,000, limited to the lesser of:
- 100% of the tax shown on the Portland Business License tax return;
- 1% of income subject to tax on the Portland Business License tax return;
- $30 per square footage of building space covered in the lease/extension or building space used by a building owner’s staff; or
- the pro rata basis adjusted amount determined by the revenue division to limit the total approved credits to $25 million over the two years of the program.
Eligible Sub-District Boundaries – Further Clarification
The Lower Albina District is that area within the boundaries formed by the Willamette River from the Fremont Bridge to the Broadway Bridge; N Broadway, from the Broadway Bridge to N Larrabee Ave; N Larrabee Ave, from N Broadway to N Hancock St; N Hancock St, from N Larrabee including tax lots to just west of N Gantenbein Ave; line northward including tax lot R102743, from N Hancock to I-5; I-5, from and including tax lot R102743 to N Stanton St; N Stanton St, from I-5 to the Fremont Bridge; Fremont Bridge, from N Stanton St to the Willamette River.
The Lloyd District is that area within the boundaries formed by the Willamette River, from the Broadway Bridge to the point just south of the Oregon Convention Center at which NE Lloyd Boulevard reaches the River; NE Lloyd Boulevard, from the Willamette River to NE 16th Avenue; NE 16th Avenue, from NE Lloyd Boulevard to NE Schuyler Street; NE Schuyler Street, from NE 16th Avenue to I-5; I-5, from NE Schuyler St to just north of N Tillamook St; including tax lot R102743, from just north of N Tillamook St to N Hancock St; N Hancock St, from just west of N Gantenbein Ave including tax lots to N Larrabee Ave; N Larrabee Ave, from N Hancock St to N Broadway; N Broadway, from N Larrabee Ave to the Willamette River.
The Downtown District is that area within the boundaries formed by the Willamette River from the point between SW Oak St and SW Harvey Milk St to the point just south of Gov. Tom McCall Waterfront Park at which a line reaches the Willamette River; line westward from the Willamette River including tax lots to SW Naito Pkwy; SW Naito Pkwy, from S Harbor Dr to SW Market St; SW Market St, from SW Naito Pkwy to SW Park Ave; SW Park Ave, from SW Market St to W Burnside St; W Burnside St, from SW Park Ave to SW 3rd Ave; SW 3rd Ave, from W Burnside to SW Pine St; SW Pine St, from SW 3rd Ave to SW 2nd Ave; SW 2nd Ave, from SW Pine St to SW Oak St; SW Oak St, from SW 2nd Ave to SW 1st Ave; SW 1st Ave, from SW Oak St to just north of SW Harvey Milk St, line eastward including tax lots to the Willamette River.
The Oldtown/Chinatown District is that area within the boundaries formed by the Willamette River, from the Broadway Bridge to the point between SW Oak St and SW Harvey Milk St, including tax lot R527710, that meets the Willamette River; line westward from the Willamette River including tax lots to SW 1st Ave; SW 1st Ave, from just north of SW Harvey Milk St to SW Oak St; SW Oak St, from SW 1st Ave to SW 2nd Ave; SW 2nd Ave, from SW Oak St, to SW Pine St; SW Pine St, from SW 2nd Ave to SW 3rd Ave; SW 3rd Ave, from SW Pine St to W Burnside St; W Burnside St, from SW 3rd Ave to NW Broadway; NW Broadway, from W Burnside St to the Willamette River.
For More Information – please refer to your tax advisor, or the Portland.gov website: https://www.portland.gov/revenue/business-tax/downtown-business-incentive-credit-program#toc-sub-district-boundaries