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H0431...............................................by REVENUE AND TAXATION
SMALL EMPLOYER INCENTIVE ACT - Amends existing law to revise the definition
of "tax incentive criteria" in the Small Employer Incentive Act of 2005.
01/30 House intro - 1st rdg - to printing
01/31 Rpt prt - to Rev/Tax
02/12 Rpt out - rec d/p - to 2nd rdg
02/13 2nd rdg - to 3rd rdg
02/14 3rd rdg - PASSED - 58-9-3
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Block,
Boe, Bolz, Bowers, Brackett, Bradford, Chadderdon, Chavez, Clark,
Collins, Crane, Durst, Eskridge, Hagedorn, Hart, Harwood, Henderson,
Jaquet, Killen, King, Kren, Labrador, Lake, Loertscher, Mathews,
McGeachin, Mortimer, Moyle, Nonini, Pasley-Stuart, Patrick, Pence,
Raybould, Roberts, Ruchti, Rusche, Sayler, Schaefer, Shepherd(02),
Shepherd(08), Shirley, Smith(30), Smith(24), Snodgrass, Thayn,
Thomas, Vander Woude, Wills, Wood(27), Wood(35), Mr. Speaker
NAYS -- Bock, Chew, Henbest, LeFavour, Luker, Marriott, Ringo(Cooke),
Shively, Trail
Absent and excused -- Black, Nielsen, Stevenson
Floor Sponsor - Moyle
Title apvd - to Senate
02/15 Senate intro - 1st rdg - to Loc Gov
02/22 Rpt out - rec d/p - to 2nd rdg
02/25 2nd rdg - to 3rd rdg
03/04 3rd rdg - PASSED - 31-0-4
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Geddes, Hammond,
Heinrich, Hill, Kelly, Keough, Little, Lodge, Malepeai(Sagness),
McGee, McKague, McKenzie, Pearce, Richardson, Schroeder, Siddoway,
Stegner, Stennett, Werk
NAYS -- None
Absent and excused -- Gannon, Goedde, Jorgenson, Langhorst
Floor Sponsors - Corder & Stegner
Title apvd - to House
03/05 To enrol
03/06 Rpt enrol - Sp signed
03/07 Pres signed
03/10 To Governor
03/14 Governor signed
Session Law Chapter 90
Effective: 07/01/08
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 431 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO THE SMALL EMPLOYER INCENTIVE ACT OF 2005; AMENDING SECTION 3 63-4402, IDAHO CODE, TO REVISE THE DEFINITION OF "TAX INCENTIVE CRITERIA." 4 Be It Enacted by the Legislature of the State of Idaho: 5 SECTION 1. That Section 63-4402, Idaho Code, be, and the same is hereby 6 amended to read as follows: 7 63-4402. DEFINITIONS. (1) The definitions contained in the Idaho income 8 tax act, shall apply to this chapter unless modified in this chapter or unless 9 the context clearly requires another definition. 10 (2) As used in this chapter: 11 (a) "Commission" means the Idaho state tax commission. 12 (b) "New plant and building facilities" means facility or facilities, 13 including related parking facilities, where employees are physically 14 employed. 15 (c) "Idaho income tax act" means chapter 30, title 63, Idaho Code. 16 (d) "Investment in new plant" means investment in new plant and building 17 facilities that are: 18 (i) Qualified investments; or 19 (ii) Buildings or structural components of buildings. 20 (e) "New employee": 21 (i) Means an individual, employed primarily within the project site 22 by the taxpayer, subject to Idaho income tax withholding whether or 23 not any amounts are required to be withheld, covered for unemployment 24 insurance purposes under chapter 13, title 72, Idaho Code, and who 25 was eligible to receive employer provided coverage under a health 26 benefit plan as described in section 41-4703, Idaho Code, during the 27 taxable year. A person shall be deemed to be so employed if such per- 28 son performs duties on a regular full-time basis. 29 (ii) The number of employees employed primarily within the project 30 site by the taxpayer, during any taxable year for a taxpayer shall be 31 the mathematical average of the number of such employees reported to 32 the Idaho department of labor for employment security purposes during 33 the twelve (12) months of the taxable year which qualified under 34 paragraph (e)(i) of this subsection (2). In the event the business is 35 in operation for less than the entire taxable year, the number of 36 employees of the taxpayer for the year shall be the average number 37 actually employed during the months of operation, provided that the 38 qualifications of paragraph (e)(i) of this subsection (2) are met. 39 (iii) Existing employees of the taxpayer who obtain new qualifying 40 positions within the project site and employees transferred from a 41 related taxpayer or acquired as part of the acquisition of a trade or 42 business from another taxpayer within the prior twelve (12) months 43 are not included in this definition unless the new position or trans- 2 1 fer creates a net new job in Idaho. 2 (f) "Project period" means the period of time beginning at the earlier of 3 a physical change to the project site or the first employment of new 4 employees located in Idaho who are related to the activities at the proj- 5 ect site, but no earlier than January 1, 2006, and ending when the facili- 6 ties constituting the project are placed in service, but no later than 7 December 31, 2010. 8 (g) "Project site" means an area or areas at which new plant and building 9 facilities are located and at which the tax incentive criteria have been 10 or will be met and which are either: 11 (i) A single geographic area located in this state at which the new 12 plant and building facilities owned or leased by the taxpayer are 13 located; or 14 (ii) One (1) or more geographic areas located in this state if 15 eighty percent (80%) or more of the investment required by subsection 16 (2)(j)(i) of this section is made at one (1) of the areas. 17 (iii) The project site must be identified and described to the com- 18 mission by a taxpayer subject to tax under the Idaho income tax act, 19 in the form and manner prescribed by the commission. 20 (h) "Qualified investment" shall be defined as in section 63-3029B, Idaho 21 Code. 22 (i) "Recapture period" means: 23 (i) In the case of credits described in sections 63-4403 and 24 63-4404, Idaho Code, the same period for which a recapture of invest- 25 ment tax credit under section 63-3029B, Idaho Code, is required; or 26 (ii) In the case of credits described in section 63-4405, Idaho 27 Code, five (5) years from the date the project period ends. 28 (j) "Tax incentive criteria" means a taxpayer meeting at a project site 29 the requirements of subparagraphs (i) and (ii) of this paragraph (j). 30 (i) During the project period, making capital investments in new 31 plant of at least five hundred thousand dollars ($500,000) at the 32 project site. 33 (ii) During a period of time beginning on January 1, 2006, and end- 34 ing at the conclusion of the project period: 35 1. Increasing employment at the project site by at least ten 36 (10) new employees each of whom must earn at least nineteen dol- 37 lars and twenty-three cents ($19.23) per hour worked during the 38 taxpayer's taxable year. 39 2. Employment increases above the ten (10) new employees 40 described in subparagraph (ii)1. of this paragraph (j) at the 41 project site shall on average earn at least fifteen dollars and 42 fifty cents ($15.50) per hour worked during the taxpayer's tax- 43 able year. Calculation of the group average earnings shall not 44 include amounts paid to any employee earning more than forty- 45 eight dollars and eight cents ($48.08) per hour.or less than46twelve dollars ($12.00) per hour worked during the taxpayer's47taxable year. The denominator of this calculation shall be the48number of new job positions filled that pay less than forty-49eight dollars and eight cents ($48.08) per hour worked during50the taxpayer's taxable year.51 3. Earnings calculated pursuant to subparagraph (ii) of this 52 paragraph (j) shall include income upon which Idaho income tax 53 withholding is required under section 63-3035, Idaho Code, but 54 shall not include income such as stock options or restricted 55 stock grants. 3 1 4. For purposes of determining whether the increased employment 2 threshold has been met, employment at the project site shall be 3 determined by calculating the increase of such new employees 4 reported to the Idaho department of labor for employment secu- 5 rity purposes over the employees so reported as of the beginning 6 of the project period or no earlier than January 1, 2006, which- 7 ever is larger; and 8 5. Maintaining net increased employment in Idaho required by 9 subparagraph (ii) of this paragraph (j) during the remainder of 10 the project period. 11 (k) "Taxpayer," for purposes of paragraphs (j) and (e) of this subsection 12 (2), means either: 13 (i) A single taxpayer; or 14 (ii) In the context of a unitary group filing a combined report 15 under section 63-3027(t), Idaho Code, all members of a unitary group 16 includable in a combined report for the tax years in which the credit 17 provided for by this chapter may be claimed. For all other purposes, 18 the terms of section 63-3009, Idaho Code, and section 63-3027(t)(1), 19 Idaho Code, apply to the meaning of "taxpayer."
STATEMENT OF PURPOSE
RS 17614
This legislation simplifies one of the restrictions for
qualifying to claim the incentives contained in the Small
Employer Incentive Act. The current computation used to
determine the average wage of new employees in excess of ten is
overly restrictive. The current formula excludes from the
computation, wages earned that are less that $12/hour. while
including the employee in the computation. To offset one
employee earning less than $12/hour the employer must have the
equivalent of one employee earning more than $31/hour. This
provision eliminates most companies from qualifying for the
incentives. All other restrictions remain in place.
FISCAL NOTE
This proposed legislation will have an estimated fiscal impact
of $50,000 to $100,000 to the general fund.
CONTACT
Name: Donald Dietrich
Agency: Commerce, Dept. of
Phone: 334-2650
STATEMENT OF PURPOSE/FISCAL NOTE H 431