H-4290.1 _______________________________________________
HOUSE BILL 2722
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State of Washington 54th Legislature 1996 Regular Session
By Representatives Scheuerman, Dyer, L. Thomas, Wolfe, Conway, Kessler, Campbell, Quall, Sheldon, Keiser, Dellwo, Morris, Blanton, Regala, Patterson, Poulsen, Thompson, Cody, Basich, Murray, Linville, Mason, Ogden and Costa
Read first time 01/17/96. Referred to Committee on Health Care.
AN ACT Relating to providing a business and occupation tax credit to small business firms that provide health benefits and share in premium costs for employees working half-time or more; adding a new section to chapter 82.04 RCW; creating a new section; and providing an expiration date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. The legislature finds that:
(1) Small business firms play an essential and increasingly important role in the state's economy.
(2) Many of the state's small business firm owners provide health insurance to their employees through small group policies at a cost that directly affects their profitability.
(3) Other small business owners are prevented from providing health benefits to their employees by the lack of access to affordable health insurance coverage.
NEW SECTION. Sec. 2. A new section is added to chapter 82.04 RCW to read as follows:
(1)For the purposes of this section:
(a) "Small business firm" means any business entity, including a sole proprietorship, corporation, partnership, or other legal entity, that is owned and operated independently from all other businesses, has the purpose of making a profit, and has fifty or fewer employees.
(b) "Employee" means an individual resident of Washington who is employed for at least twenty hours per week by the employer seeking the tax credit and who has been continuously employed for at least sixteen weeks.
(c) "Employer" means an individual or corporate business, who pays no less than fifty percent of the premium cost of a qualified health benefit plan, as defined under (d) of this subsection, is subject to the business and occupation tax as determined under this chapter, and has fifty or fewer employees.
(d) "Qualified health benefit plan" means a health benefit plan providing benefits equal to, or greater than, the benefits available under the Washington basic health plan pursuant to chapter 70.47 RCW.
(e) "Business" means either a single taxpayer or consortium of taxpayers subject to taxation under this chapter.
(2) Small business firms that annually employ less than fifty employees may credit against the tax imposed by this chapter the value of employer premium costs for employer-provided or state-approved employer-sponsored qualified health benefit plan coverage for employees.
(3) The value of the qualified health benefit plan premium costs provided or sponsored by the employer to the employee, without charge, shall be determined by the allocation of the cost method using generally accepted accounting standards.
(4) The credit allowed under this section is limited to an amount equal to fifty percent of the value of the employer premium costs determined under subsection (3) of this section. The total credits allowed under this section for a business may not exceed ten thousand dollars per calendar year.
(5) Before claiming the credit under this section, the small business firm must provide proof of qualified health benefit plan coverage availability for all its employees to the office of the insurance commissioner. The office of the insurance commissioner shall annually report to the department of revenue the small business firms that provide approved health benefit plan coverage eligible for the tax credit available under this section.
(6) This section applies only to an employer's qualified health benefit plan premium costs for which an application is approved after June 30, 1996.
(7) This section shall expire June 30, 2001.
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