B Corps Win Healthy Tax Break in Landmark Law

a_bcorp_logo_posB Lab, the force behind a new business sector designation—called the B Corporation—which recognizes companies that meet a set of social, environmental and institutional benchmarks for sustainability, is facing a Herculean effort. The work won’t be in convincing people that business can be a positive force for social change—there are already 240 companies in 28 states (representing more than 50 industries) that have become B Corps, and I’m sure that number will continue to grow. The bigger task will be in lobbying for legislation, on a state-by-state basis, to recognize and provide incentives to B Corporations.

And that effort got an important boost today: The Philadelphia City Council voted unanimously to pass a bill that creates a new sustainable business tax credit for certified sustainable businesses located in the City of Philadelphia. For tax years 2012 through 2017, 25 eligible businesses shall receive a tax credit of $4,000 to be used against the gross receipts portion of the business privilege tax.  Companies can be classified as certified sustainable businesses once they are certified as B Corporations.

Not only does this bode well for B Lab’s efforts to gain governmental recognition for B Corps, it also makes Philadelphia (a city that is already making strides in sustainability) the first city in the country to adopt a financial incentive for sustainable businesses.

And while city laws are still a far cry from state-wide legislation, Philly’s support of B Corps is already generating some momentum among other city councils—specifically in Media and Yonkers, PA.—which are considering similar legislation.

Brian Taussig-Lux, general manager of Untours, a travel company based in Media and a founding B Corporation, is hopeful that his city council will succeed in introducing incentives for his and other B Corps there. Philadelphia’s passage of the bill represents a powerful precedent, he says.  “Once one city does this, it’s a model. I can say, ‘look at what Philadelphia can do.’ It’s in black and white.”

He adds that tax incentives, and—eventually—recognition at the state level, would help Untours and similar companies do more good work. “We are paying taxes just like the guy down the street, whose business might even be having a negative impact on community. If we could get a chunk back from Uncle Sam, we could make a bigger difference.”

B Lab is also working with both business and legal working groups in the California legislature to introduce a bill early next year that, if passed, would give B Corps legal recognition and support in that state.

Freelance writer Mary Catherine O'Connor finds that a growing number of companies are proving the ways that they can make good financially, socially and environmentally (as the triple bottom line theory suggests).With that in mind, she contributes to Triple Pundit, as well as to Earth2Tech and other pubs focused on sustainability. She also writes The Good Route, an Outside Magazine blog that addresses the intersection of sustainability and the active/outdoor life.To find out more, or to reach her, go to www.mcoconnor.com.

10 responses

  1. Great news for B Corp and the folks (the Houlihans and Jay Coen Gilbert especially) behind it. Just a correction, the quote assigned to Untour GM Brian Taussig-Lux (full disclosure, I work for Untours), should say Media, PA-based travel company since we're not a media-based company but actually based in the town of Media , PA (first Fair Trade town in America, thanks to the Untours Foundation and many businesses in Media).

  2. Doh! Thanks, Dodge, for the catch. I had capitalized Media in the original post but it was lower-cased somewhere along the way. Fixed now.

  3. Doh! Thanks, Dodge, for the catch. I had capitalized Media in the original post but it was lower-cased somewhere along the way. Fixed now.

  4. Pingback: Philadelphia City Council Passes Unanimous Vote to Create Sustainable City Policy « Mediacompost Beta
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