BILL REQ. #: H-3835.1
State of Washington | 61st Legislature | 2010 Regular Session |
Prefiled 01/07/10. Read first time 01/11/10. Referred to Committee on Finance.
AN ACT Relating to providing a business and occupation tax credit for qualified employment positions; and adding a new section to chapter 82.04 RCW.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 A new section is added to chapter 82.04 RCW
to read as follows:
(1) A credit is allowed against the tax due under this chapter for
new qualified employment positions created as provided in this section.
(2) The credit equals:
(a) Four thousand dollars for each qualified employment position
with wages and benefits greater than forty thousand dollars annually,
and for which the business offers a health care plan, that is directly
created in an eligible business; or
(b) Two thousand dollars for each qualified employment position
with wages and benefits no less than one hundred fifty percent of the
minimum wage and no more than forty thousand dollars annually, and for
which the business offers a health care plan.
(3) For purposes of calculating the amount of credit under
subsection (2) of this section with respect to qualified employment
positions, the following applies:
(a) In determining the number of qualified employment positions, a
fractional amount is rounded down to the nearest whole number; and
(b) Wages and benefits for each qualified employment position are
equal to the quotient derived by dividing:
(i) The sum of the wages and benefits earned for the four
consecutive full calendar quarters for which a credit under this
section is earned by all of the person's new seasonal employees hired
during that period; by
(ii) The number of qualified employment positions plus any
fractional amount subject to rounding as provided under (a) of this
subsection.
(4) For purposes of this section, a credit is earned for the four
consecutive full calendar quarters after the calendar quarter during
which the first qualified employment position is filled.
(5) The department must keep a running total of all credits allowed
under this section during each fiscal year. The department may not
allow any credits which would cause the total to exceed five million
dollars in any fiscal year. If all or part of an application for
credit is disallowed under this subsection, the disallowed portion must
be carried over to the next fiscal year. However, the carryover into
the next fiscal year is only permitted to the extent that the cap for
the next fiscal year is not exceeded.
(6) No recipient may use the tax credits to decertify a union or to
displace existing jobs in any community in the state.
(7) The credit may be used against any tax due under this chapter,
and may be carried over until used. No refunds may be granted for
credits under this section.
(8) Application for tax credits under this section must be made
within ninety consecutive days after the first qualified employment
position is filled. The application must be made to the department in
a form and manner prescribed by the department. The application must
contain information regarding the location of the business, the
applicant's average employment, if any, at the facility for the four
consecutive full calendar quarters immediately preceding the earlier of
the calendar quarter during which the application required by this
section is submitted to the department or the first qualified
employment position is filled, estimated or actual new employment
related to the business, estimated or actual wages of employees related
to the business, estimated or actual costs, time schedules for
completion and operation, and other information required by the
department. The department must prescribe a method for calculating a
seasonal employer's average employment levels. The department must
rule on the application within sixty days.
(9)(a) Each recipient must submit a report to the department by the
last day of the month immediately following the end of the four
consecutive full calendar quarters for which a credit under this
section is earned. The report must contain information, as required by
the department, from which the department may determine whether the
recipient is meeting the requirements of this section. If the
recipient fails to submit a report or submits an inadequate report, the
department may declare the amount of taxes for which a credit has been
used to be immediately assessed and payable. The recipient must keep
records, such as payroll records showing the date of hire and
employment security reports, to verify eligibility under this
subsection (9).
(b) If, on the basis of a report under this section or other
information, the department finds that a business is not eligible for
tax credit under this section for reasons other than failure to create
the required number of qualified employment positions, the amount of
taxes for which a credit has been used is immediately due.
(c) If, on the basis of a report under this subsection (9) or other
information, the department finds that a business has failed to create
the specified number of qualified employment positions, the department
must assess interest, but not penalties, on the credited taxes for
which a credit has been used. The interest must be assessed at the
rate provided for delinquent excise taxes, must be assessed
retroactively to the date of the tax credit, and must accrue until the
taxes for which a credit has been used are repaid.
(10) The employment security department must make, and certify to
the department, all determinations of employment and wages requested by
the department under this section.
(11) Applications, reports, and any other information received by
the department under this section are not confidential and are subject
to disclosure.
(12) A person claiming credit under chapter 82.62 RCW or RCW
82.04.44525 or 82.04.448 cannot claim a credit under this section.
(13) The following definitions apply throughout this section,
unless the context clearly requires otherwise.
(a) "Applicant" means a person applying for a tax credit under this
section.
(b) "Eligible business" means a business located within the state
of Washington with ten or fewer employees.
(c) "First qualified employment position" means the first qualified
employment position filled for which a credit under this section is
sought.
(d) "Health care plan" means any "employee welfare benefit plan" as
defined by the employee retirement income security act of 1974, Title
29 U.S.C. Sec. 1001 et seq., and any "health plan" or "health benefit
plan" as defined in RCW 48.43.005, for the purpose of providing for its
employees or their beneficiaries, through the purchase of insurance or
otherwise, health care services. For the purposes of this section,
"health care services" means services offered or provided by health
care facilities and health care providers relating to the prevention,
cure, or treatment of illness, injury, or disease.
(e)(i)(A) "Qualified employment position" means a permanent full-time employee employed in the eligible business in Washington during
four consecutive full calendar quarters.
(B) For seasonal employers, "qualified employment position" also
includes the equivalent of a full-time employee in work hours for four
consecutive full calendar quarters.
(ii) For purposes of this subsection (13)(d), "full time" means a
normal work week of at least thirty-five hours.
(iii) Once a permanent, full-time employee has been employed, a
position does not cease to be a qualified employment position solely
due to periods in which the position goes vacant, as long as:
(A) The cumulative period of any vacancies in that position is not
more than one hundred twenty days in the four quarter period; and
(B) During a vacancy, the employer is training or actively
recruiting a replacement permanent, full-time employee for the
position.
(f) "Recipient" means a person receiving tax credits under this
section.
(g) "Seasonal basis" means a continuous employment period of less
than twelve consecutive months, for the purposes of "seasonal employee"
and "seasonal employer" under this section.
(h) "Seasonal employee" means an employee of a seasonal employer
who works on a seasonal basis.
(i) "Seasonal employer" means a person who regularly hires more
than fifty percent of its employees to work on a seasonal basis.
(14) No applications may be accepted after June 30, 2011.
NEW SECTION. Sec. 2 If any provision of this act or its
application to any person or circumstance is held invalid, the
remainder of the act or the application of the provision to other
persons or circumstances is not affected.