A merchants association is a group of business owners that exists to anchor and stabilize neighboring businesses around beautification efforts, marketing and promotions, business retention, and economic development activities within a commercial district.
In Texas, there are two different nonprofit entity options available to merchants associations: (1) a nonprofit association and (2) a nonprofit corporation. Traditional merchants associations qualify for both of these organizational options, since they are typically engaged in work that is of a nonprofit nature, by providing civic services to benefit a community and utilizing revenues in furtherance of the merchants association’s mission.
A business improvement district (BID) or public improvement district (PID) is a defined area within which businesses pay an additional tax in order to fund projects within the district’s boundaries. The majority of taxpayers within a proposed BID/PID must petition the local government to form a BID/PID.