BILL REQ. #:  S-3468.1 

Read first time 01/15/14.   Referred to Committee on Ways & Means.

     AN ACT Relating to tax credits for hiring individuals with developmental disabilities; adding a new section to chapter 82.04 RCW; and providing an effective date.

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) In computing the tax imposed under this chapter, a person is allowed a credit against the tax due. The credit is equal to one thousand dollars per fiscal year for each full-time employment position filled by an individual with a developmental disability after the effective date of this section. A credit is earned for the fiscal year the person is hired to fill the position. Additionally, a credit is earned for each fiscal year the position is continuously maintained over the subsequent consecutive fiscal years. If a position is filled before January 1st, this position is eligible for the full yearly credit. If it is filled after December 31st, this position is eligible for half of the credit.
     (b) Credits are available on a first-in-time basis. The department must maintain a running total of all credits claimed under this section during each fiscal year. The department may not allow any credit, or portion thereof, which would cause the total amount of credit claimed under this section to exceed two million dollars in any fiscal year. The department must provide written notice to any person who has claimed tax credits in excess of the two million dollar limitation in this subsection. The notice must indicate the amount of tax due and provide that the tax be paid within thirty days from the date of such notice. The notice must also advise the person that the unused credit can be claimed in the next fiscal year, subject to the two million dollar limit. The department may not assess penalties and interest as provided in chapter 82.32 RCW on the amount due in the initial notice, if the amount due is paid by the due date specified in the notice, or any extension thereof.
     (c) A person may claim the credit under this section only against taxes originally due and reported to the department on or after the date that the employment position is filled. The amount of credit claimed for a reporting period may not exceed the tax otherwise due under this chapter for that reporting period. Persons unable to claim their credit, or any portion thereof, in the fiscal year for which the credit was earned may carry the unused credit over to subsequent fiscal years until used. However, the carryover into subsequent fiscal years is only permitted to the extent that the two million dollar limit for any fiscal year is not exceeded. No refunds may be granted for credits under this section.
     (d) No application is necessary to claim the tax credit.
     (e) To claim a credit under this section, a person must electronically file with the department all returns, forms, and any other information required by the department, in an electronic format as provided or approved by the department. Any return, form, or information required to be filed in an electronic format under this section is not filed until received by the department in an electronic format. As used in this subsection, "return" has the same meaning as "return" in RCW 82.32.050.
     (f) If the position filled by an individual with a developmental disability is not full time, the credit in (a) of this subsection must be ratably reduced.
     (g) Credit is authorized only for employees hired for full-time employment positions where the hiring takes place on or after July 1, 2014. Full-time employment positions filled by existing employees are eligible for the credit under this section only if the position vacated by the existing employee is filled by a new hire, and both the existing employee and the new hire are individuals with a developmental disability.
     (h) A person may not claim the credit under this section if the person has claimed a credit against the tax due under this chapter, under any other provision of law, with respect to the same employment position.
     (2) If at any time the department finds that a person is not eligible for the tax credit under this section for any reason, the amount of taxes for which a credit has been claimed for which the person was not eligible for the credit is immediately due. The department must assess interest, but not penalties, on the taxes for which the person is not eligible. The interest must be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW, assessed retroactively to the date the tax credit was claimed, and must accrue until the taxes for which a credit has been used are repaid.
     (3) The definitions in this subsection apply throughout this section.
     (a) "Fiscal year" means the twelve-month period beginning July 1st and ending the following June 30th.
     (b) "Full-time" means at least thirty-five hours a week, four hundred fifty-five hours a quarter, or one thousand eight hundred twenty hours a year.
     (c) "Full-time employment position" means a permanent full-time employee, who is employed for at least twelve consecutive months. Once a permanent full-time employee has been hired, a position does not cease to be a full-time employment position solely due to periods in which the position goes vacant, as long as:
     (i) The cumulative period of any vacancies in that position is not more than one hundred twenty days in the fiscal year;
     (ii) During a vacancy, the employer is training or actively recruiting a replacement; and
     (iii) The vacancy is filled by a permanent full-time employee who is an individual with a developmental disability.
     (d) "Individual with a developmental disability" means an individual with a developmental disability as defined in RCW 71A.10.020.

NEW SECTION.  Sec. 2   This act takes effect July 1, 2014.