Overview of the Downtown Business Incentive Credit Program
Portland City Council adopted the Downtown Business Incentive (DBI) credit program on September 14, 2023 (Ordinance 191451).
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:
Any business that meets the following criteria may participate in the DBI credit program:
Be registered with the City of Portland's Revenue Division and be in compliance for the prior periods.
Enter into a new lease, or extend a current lease, during the 2023 or 2024 calendar year for building space within the eligible sub-district boundaries for a period of four years or more; or
Own and occupy that building space within the eligible sub-district boundaries.
Maintain 15 employees or more working at least half their time in the leased or owned building space within the eligible sub-district boundaries over the four-year period.
The DBI credit program allows a one-time, nonrefundable tax credit, claimable over four years, starting in either tax year 2023 or 2024 to any business that meets the credit requirements.
The maximum credit available to each eligible business is $250,000, limited to the lesser of:
- 1% of City of Portland “income subject to tax” as shown on the business tax return in the year of origination; 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.
The Revenue Division may reduce the eligible credit on a pro rata basis once the program cap of $25 million is reached. The Revenue Division will notify any business whose credit is reduced under these circumstances.
Claiming the Credit on the Return
Applying for the Credit
A qualifying business must apply for the credit. The due date for submitting the application for tax year 2023 will be January 31, 2024. The due date for submitting the application for tax year 2024 will be January 31, 2025.
If the business is leasing new space, a lease entered into in 2023 may be used to calculate the credit on either the 2023 or 2024 business tax return. The year of origination will be 2023 if calculated on the 2023 business tax return or 2024 if calculated on the 2024 business tax return.
If the business is extending their existing lease, the lease must be extended from the end date of their current lease that expires in 2023 or 2024.
Building space owned during 2023 can also be used to calculate the credit on either the 2023 or 2024 business tax return.
Calculating the Credit
A business that is approved for the DBI credit will calculate their total credit in the credit approval year (“year of origination”). This credit will be divided into four equal portions and deducted on the business tax return in the year of origination and over the following three years business tax returns.
Claiming the Credit
The portion of the credit claimed, in each of the four years, cannot exceed the City of Portland Business License Tax on the business tax return for that year. If the portion of the credit allowed for one of the years exceeds the City of Portland Business License Tax on the business tax return for that year, it cannot be carried forward or used on the business tax return for another year.
The business is required to provide an attestation that they had 15 or more employees working at least half their time in the leased office space in the sub-district for each year they claim the credit.
If the business breaks the lease prior to the end of the lease period, sells the building before the four-year period of the credit lapses, or fails to meet the employee requirements during the four-year period of the credit, the entire credit previously claimed must be repaid with statutory interest. No penalty will apply to the tax due related to the lost credit.
Key Dates and Deadlines
|Tax year||Application Due Date||Notification Timeframe|
|2023||1/31/2024||Within 45 days of application or 3/15/2024|
|2024||1/31/2025||Within 45 days of application or 3/15/2025|
A business is only eligible to apply for one credit (for either 2023 or 2024). Only one application will be required for the credit.
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.