The Senate Business, Financial Services & Trade Committee passed a bill allowing businesses to carry forward tax credits earned under the Main Street Tax Credit Program for an additional two years; however, a striking amendment limits several proposed tax credit increases.

In an effort to restore downtown and neighborhood districts, the state created the Main Street Tax Credit Program in 1984 to provide businesses with tax credits for their private contributions to eligible downtown organizations. Under current law, a tax credit earned in the program must be used during the calendar year in which the contribution is approved. However, due to the COVID-19 pandemic, many businesses have an insufficient tax liability to use the full amount of their tax credit. HB 1279 would allow businesses to carry their earned tax credit forward an additional two years or until December 31, 2023.

A striking amendment to the bill adopted by the Senate Business, Financial Services & Trade Committee maintains the additional time to use earned tax credits; unfortunately, it also limits a few proposed tax credit increases. As adopted, the striking amendment:

• Removes an additional 15% credit provided for approved contributions made starting in 2021.
• Decreases the additional credit provided for approved contributions made starting in 2021 to the Main Street Trust to 25%.
• Eliminates the additional credit provided for approved contributions made in 2020.

While AWC appreciates the extended time for businesses to use these tax credits, we are concerned with the reduction in additional available tax credits. The COVID-19 pandemic has impacted communities across Washington, and the Main Street Tax Credit Program is an important tool for investing in local economic development.

HB 1279 is now in the Senate Ways & Means Committee awaiting further consideration.