The City of Tacoma and the Tacoma Community Redevelopment Authority subcommittee recommended two commercial building projects in Tacoma for $7.35 million in federal tax incentives this year – a recommendation accepted by the Washington State Department of Community, Trade and Economic Development. The Roberson Building Co., for its Shuffleboard Building project, and the Rainier Pacific Bank Building, will each receive a federal tax incentive allocation.
Tacoma is the only place in Puget Sound – and one of only 28 urban communities around the country – to receive a Department of Housing and Urban Development (HUD) Renewal Community (RC) designation in 2002. With the designation, Tacoma businesses and developers within the RC area became eligible for a variety of federal tax credits and deductions through 2009.
One of those is the Commercial Revitalization Deduction (CRD) allocation which allows property owners to use an accelerated depreciation schedule on their projects.
Each year Tacoma projects compete for $12 million in CRD allocations. This year, two projects applied for a piece of that $12 million pie. The state of Washington awarded the allocation to:
– Rainier Pacific Bank Building (Rainier Pacific Bank): $6.9 million; and
– Shuffleboard Building (Roberson Building Co.): $450,000.
The benefits to these projects include a reduced federal tax bill and an increased ability to make their projects pencil by giving owners financial relief early in the projects when they incur the most expenses.
Rainier Pacific Bank Building also received an allocation in 2003 of $3.1 million, for a total of $10 million in CRD (the maximum amount allowable per project). Other recipients that shared in the $12 million annual allocation for 2003 were Fraternity Hall (a Roberson Building Co. project), Albers Mill, the Courtyard Marriott Hotel and the Ted Brown Music Building.
In addition to the CRD allocation available to property owners and developers, Tacoma businesses can also take advantage of the RC designation through other tax credits and deductions, including the RC Wage Credit, Increased Section 179 Deduction and Zero Percent Capital Gains. Unlike the CRD, these business tax incentives do not require an application. Instead, businesses can file the proper forms directly with the Internal Revenue Service.