Print Friendly HOUSE BILL NO. 431
– Small employer, tax incentive
HOUSE BILL NO. 431
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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),
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
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature Second Regular Session - 2008
IN 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
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-
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
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 than
46 twelve dollars ($12.00) per hour worked during the taxpayer's
47 taxable year. The denominator of this calculation shall be the
48 number of new job positions filled that pay less than forty-
49 eight dollars and eight cents ($48.08) per hour worked during
50 the 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.
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
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.
This proposed legislation will have an estimated fiscal impact
of $50,000 to $100,000 to the general fund.
Name: Donald Dietrich
Agency: Commerce, Dept. of
STATEMENT OF PURPOSE/FISCAL NOTE H 431