Small Business Legislation – Sept 2019 update
Several pieces of legislation have been introduced in the past month that would reduce the tax burden on long-standing businesses in the District.
Do you have thoughts on how this legislation could impact your business, or recommended changes to make it work better for you? Contact CHAMPS at firstname.lastname@example.org with your suggestions.
Two measures were introduced by Councilmember Charles Allen (info below from 9/17/19 press release), and a separate but overlapping measure was introduced by Councilmember Kenyan McDuffie (info below from 9/17/19 press release)
Small and Local Business Assistance Amendment Act of 2019 by Councilmember Charles Allen
This bill aims to ease the burden of rising property taxes that small business owners report as one of the most significant rising costs to doing business in the District of Columbia in three ways.
- First, it creates a tax credit of 20 percent (capped at $10,000 annually) for rent paid or property taxes paid by a small, local business – which closely follows the Schedule H tax deduction for residential tenants by allowing tax relief based on the amount of a tenant’s rent that go toward paying the landlord’s property taxes. This will provide relief to local businesses who are feeling the pinch when rising property taxes are passed on from the landlord to their small business tenant.
- Second, it would provide property tax relief to landlords who choose to rent all or a portion of their space to small, local businesses rather than a national chain – those properties would receive a 10% relief off of the total value of the property, capped at $100,000.
- Finally, it would create a Small and Local Business Credit Enhancement Program within the Department of Small and Local Business Development to provide credit enhancement services for small and local businesses. The bill specifies one program in the bill – a rent guarantee for up to three years that will provide incentive for developers to lease their space to small and local businesses. The rent guarantees would be 100% in year one, 50% in year two, and 25% year three.
- The bill was co-introduced by Councilmembers McDuffie, Todd, Trayon White, Robert White, Nadeau, and Evans. It was co-sponsored by Councilmembers Silverman and Grosso.
This bill would provide assistance for “longtime resident businesses” that have been operating in the District for at least 20 years, or 15 years in the case of smaller businesses. Businesses would have to show their continuous operation and support from the community it has served. Businesses that meet the criteria would be placed on a registry and be eligible for:
Longtime Resident Business Preservation Amendment Act of 2019 by Councilmember Charles Allen
- grants up to $1.5 million or low-interest loans up to $2 million for repair or replacement of historic signs and facades or heavy equipment, other capital improvements, and operating costs and approved by the Department of Small and Local Business Development;
- rent stabilization payments of up to 10 percent of the average commercial rent for the census tract, if the longtime business is at a substantial risk of displacement.
This was inspired by a legacy business program in San Francisco. The District started a similar grant program this year, but this legislation would greatly expand the eligible businesses and the benefits provided. It would create a fund to provide the capital for grants and loans.
The bill was co-introduced by Councilmembers McDuffie, Todd, Evans, Robert White, Nadeau, Trayon White, Bonds, and Cheh. The bill was co-sponsored by Councilmembers Silverman and Grosso.
Protecting Local Area Commercial Enterprises (P.L.A.C.E.) Amendment Act of 2019 or the ‘Affordable PLACE Act’ [B23-432] by Councilmember Kenyan McDuffie
Today, Councilmember Kenyan R. McDuffie, Chair of the Committee on Business and Economic Development introduced the The bill supports both legacy and small local businesses by providing technical and financial assistance, incentivizing landlords to enter into or renew leases with legacy businesses, and creating protections to commercial tenants as they negotiate their leases. The legislation would:
- Establish the Legacy Business Program within the Department of Small and Local Business Development (DSLBD).
- Authorize DSLBD to issue grants to legacy businesses of up to $50,000 per year.
- Provide an opportunity for landlords to apply for a tax abatement provided they enter into a lease with a an eligible small business.
- Pays for the program by directing any revenue collected by the Discount Fee to be directed to the Legacy Business Program rather than to the general fund.