Business Tax Policy: Exempt Status in Tax Year 2008 and the 22a Credit
City Council approved the acceleration of the First Year Adjustment Credit (22a Credit) in December 2008. PCC 7.02.860 C states that “Once the credit amount is determined, the Bureau will apply 100 percent of that amount towards tax payments due and owing for the 2008 license tax year.” The purpose of the acceleration by City Council was to provide tax relief to businesses in this current economic downturn.
For purposes of the 22a Credit for tax year 2008 only, a business that files an exemption for 2008 tax year, provided they had actual operations/revenue during the tax year, will be considered to have a 2008 tax year payment due of $0 and be able to claim the 22a Credit, either as a refund or credit the amount to another tax year.
In order to claim the 22a Credit, an exempt business is required to file the Combined Tax Return with supporting documentation instead of the annual exemption form with supporting documentation. They would not be subject to the minimum tax of $100 for either the City or the County on this return. Failure to file the 2008 tax year on the Combined Tax Return will result in a loss of the 22a Credit. The exempt business may request a refund or credit to another year. However, if the business has any balances due on back tax years, the refundable 22a credit must first be used to pay off those balances before any remaining amount can be refunded or carried forward to a future tax year.
7-15-09 Sue Klobertanz
Date Director, Revenue Bureau