REVENUE AND TAXATION
THE IDAHO SMALL EMPLOYER INCENTIVE ACT OF 2005
63-4402. Definitions. (1) The definitions contained in the Idaho income tax act shall apply to this chapter unless modified in this chapter or unless the context clearly requires another definition.
(2) As used in this chapter:
(a) "Commission" means the Idaho state tax commission.
(b) "New plant and building facilities" means facility or facilities, including related parking facilities, where employees are physically employed.
(d) "Investment in new plant" means investment in new plant and building facilities that are:
(i) Qualified investments; or
(ii) Buildings or structural components of buildings.
(e) "New employee":
(i) Means an individual, employed primarily within the project site by the business entity, subject to Idaho income tax withholding whether or not any amounts are required to be withheld, covered for unemployment insurance purposes under chapter 13, title 72, Idaho Code, and who was eligible to receive employer provided coverage under a health benefit plan as described in section 41-4703, Idaho Code, during the taxable year. A person shall be deemed to be so employed if such person performs duties on a regular full-time basis.
(ii) The number of employees employed primarily within the project site by the business entity, during any taxable year for a business entity shall be the mathematical average of the number of such employees reported to the Idaho department of labor for employment security purposes during the twelve (12) months of the taxable year which qualified under paragraph (e)(i) of this subsection. In the event the business is in operation for less than the entire taxable year, the number of employees of the business entity for the year shall be the average number actually employed during the months of operation, provided that the qualifications of paragraph (e)(i) of this subsection are met.
(iii) Existing employees of the business entity who obtain new qualifying positions within the project site and employees transferred from a related business entity or acquired as part of the acquisition of a trade or business from another business entity within the prior twelve (12) months are not included in this definition unless the new position or transfer creates a net new job in Idaho.
(f) "Project period" means the period of time beginning at a physical change to the project site or the first employment of new employees located in Idaho who are related to the activities at the project site, and ending when the facilities constituting the project are placed in service, but no later than December 31, 2030, and no longer than ten (10) years after the beginning.
(g) "Project site" means an area or areas at which new plant and building facilities are located and at which the tax incentive criteria have been or will be met and which are either:
(i) A single geographic area located in this state at which the new plant and building facilities owned or leased by the taxpayer are located; or
(ii) One (1) or more geographic areas located in this state if eighty percent (80%) or more of the investment required by subsection (2)(j)(i) of this section is made at one (1) of the areas.
The project site must be identified and described to the commission by a taxpayer subject to tax under the Idaho income tax act, in the form and manner prescribed by the commission.
(h) "Qualified investment" shall be defined as in section 63-3029B, Idaho Code.
(i) "Recapture period" means:
(i) In the case of credits described in sections 63-4403 and 63-4404, Idaho Code, the same period for which a recapture of investment tax credit under section 63-3029B, Idaho Code, is required; or
(ii) In the case of credits described in section 63-4405, Idaho Code, five (5) years from the date the project period ends.
(j) "Tax incentive criteria" means a business entity meeting at a project site the requirements of subparagraphs (i) and (ii) of this paragraph.
(i) During the project period, making capital investments in new plant of at least five hundred thousand dollars ($500,000) at the project site.
(ii) During a period of time beginning on January 1, 2006, and ending at the conclusion of the project period:
1. Increasing employment at the project site by at least ten (10) new employees each of whom must earn at least nineteen dollars and twenty-three cents ($19.23) per hour worked during the business entity’s taxable year.
2. Employment increases above the ten (10) new employees described in subparagraph (ii)1. of this paragraph at the project site shall on average earn at least fifteen dollars and fifty cents ($15.50) per hour worked during the business entity’s taxable year. Calculation of the group average earnings shall not include amounts paid to any employee earning more than forty-eight dollars and eight cents ($48.08) per hour.
3. Earnings calculated pursuant to subparagraph (ii) of this paragraph shall include income upon which Idaho income tax withholding is required under section 63-3035, Idaho Code, but shall not include income such as stock options or restricted stock grants.
4. For purposes of determining whether the increased employment threshold has been met, employment at the project site shall be determined by calculating the increase of such new employees reported to the Idaho department of labor for employment security purposes over the employees so reported as of the beginning of the project period or no earlier than January 1, 2006, whichever is larger; and
5. Maintaining net increased employment in Idaho required by subparagraph (ii) of this paragraph during the remainder of the project period.
(k) "Business entity," for purposes of paragraphs (j) and (e) of this subsection, means either:
(i) A single taxpayer; or
(ii) A single business, a separate division, branch, or identifiable segment, or a group of businesses related through ownership pursuant to section 267 of the Internal Revenue Code. For purposes of this subsection, a "separate division, branch, or identifiable segment" shall be deemed to exist if, prior to the date of application, the income and expense attributable to such a separate division, branch, or identifiable segment could be separately ascertained from the books of accounts and records.
[63-4402, added 2005, ch. 370, sec. 1, p. 1179; am. 2006, ch. 314, sec. 1, p. 974; am. 2007, ch. 360, sec. 25, p. 1087; am. 2008, ch. 90, sec. 1, p. 250; am. 2009, ch. 191, sec. 1, p. 622; am. 2020, ch. 243, sec. 1, p. 710.]