PORT TOWNSEND — A portion of a year-end contribution to the Port Townsend Main Street Program can also count toward a business and occupation tax obligation.
“If you choose to do this, you can determine exactly where your taxes go,” said Main Street board President Susan Windle.
“And you can choose exactly how much goes to us and to your taxes.”
Port Townsend Main Street has participated in the tax incentive program for five years and in 2009 earned $13,000, approximately 10 percent of its budget, from that source.
Small businesses are assessed business and occupation taxes measured on the value of products, gross proceeds of sale or gross income of the business, according to the Washington Department of Revenue website, www.dor.wa.gov.
The amount and schedule of the tax can vary, but Windle estimated that many local businesses pay about $750 per year in taxes on a monthly basis.
To participate in the program, a business would, for instance, make a contribution of $1,000 to the Port Townsend Main Street Program before Dec. 31.
Of this, $750 would be designated toward the tax, with the remainder documented as a direct contribution, since the process requires the donation to be 33 percent above the credited tax.
The business will then have the $750 credit on its tax bill, which would be applied toward the tax as it is assessed.
Since the winter months are often slow, any contribution will probably cover the tax bill for a good part of the year even if business is good, Windle said.
The program has drawbacks for both merchants and Main Street, Windle said.
Merchants who are stretched for cash must come up with a large amount by the end of the year rather than paying the tax in smaller increments.
And since merchants usually wait until the deadline to determine exactly how much they can afford, Main Street cannot accurately determine its yearly budget until all the contributions are received.
The good news, Windle said, is that the money is credited to the tax account immediately and satisfies a debt that will be due in the next calendar year.
The program is open to any business that pays business and occupation taxes in the state. It is not restricted to those in the Port Townsend area.
The full amount of the contribution qualifies as a charitable deduction, while up to 75 percent can be designated as a tax credit.
To participate, visit www.dor.wa.gov and register to e-file, then click on the Main Street Tax Credit link and select Port Townsend Main Street Program as the recipient.
Once approved, contributions should be delivered to Port Townsend Main Street, 211 Taylor St., Suite 1.
For more information, visit www.ptmainstreet.org or phone 360-385-7911.
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Jefferson County Reporter Charlie Bermant can be reached at 360-385-2335 or charlie.bermant@peninsuladailynews.com.