Senate Bill 74 modifies the New Economy Jobs Tax Credit that has been in affect since 2007 but has not been utilized as much as policymakers would have hoped. It passed the Senate 19-0-2 earlier in June and it passed the House on the last night 40-0-1.
The New Economy Jobs Tax Credit offers a 10-year tax break based on the number of jobs created and the salary those positions pay, as determined by an indexed salary threshold. To qualify now, a company would need to create 50 jobs that pay a salary of about $120,000 or 200 jobs with an average salary of $70,000. However, the credit as currently constructed requires those companies to add all of those new jobs in a single calendar year. SB 74 would change that provision to a 12-month period that could extend over two calendar years.
The measure also would move the timing of the annual salary threshold adjustment to provide businesses with greater certainty about the incentive being offered. It further protects taxpayers by disqualifying companies who fall below certain employment thresholds for two consecutive years.
The bill also streamlines the administration of the tax credit, which is currently counted against the bank franchise tax, the insurance premium tax, the corporate income tax and “other taxes and fees.” SB 74 would replace “other taxes and fees” with the personal income tax and make the credit refundable only against one of those four taxes.
Prime sponsor Senator Jack Walsh: “The credit is designed to help attract big employers and large numbers of high-paying jobs, which is what we all would like to see,” Walsh said. “Unfortunately, the fine print in the law is keeping companies from using it, which really defeats the purpose. With a few minor tweaks, I think this credit will finally produce the jobs it was meant to attract.”
WHERE IS THE BILL NOW? Senate passed 19-0-2. House passed 40-0-1. Sent to Governor
DEMOCRATIC SPONSORS – Walsh, McBride, Delcollo, Osienski, Bush, Paradee, Brady, Mitchell, Viola
REPUBLICAN SPONSORS – Yearick, Wilson, Gray, Ramone, M.Smith
YES VOTES – HOUSE — Baumbach Bennett Bentz Bolden Brady Briggs King Bush Carson Chukwuocha Collins Cooke D.Short Dorsey Walker Dukes Gray Griffith Heffernan Hensley Jaques K.Johnson K.Williams Kowalko Longhurst Matthews Michael Smith Minor-Brown Mitchell Morris Osienski Postles Q.Johnson Ramone Schwartzkopf Seigfried Shupe Smyk Spiegelman Vanderwende Viola Yearick ||| SENATE — Bonini Brown Cloutier Delcollo Ennis Hansen Hocker Lawson Lockman McBride Paradee Pettyjohn Poore Richardson Sokola Sturgeon Townsend Walsh Wilson
NO VOTES – HOUSE — ||| SENATE —
ABSENT – Lynn Lopez McDowell