Jobs Bills Could Sweeten Tax Breaks for Employers

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"This is the most difficult session to watch in my 35 years," Idaho's Labor Department Director Roger Madsen told lawmakers this morning.

Madsen was testifying in support of a jobs bill crafted by Gov. C.L. "Butch" Otter. Simply put, if employers create jobs sooner than later they could enjoy significant tax benefits.

The measure could kick back anywhere from 2 to 6 percent of a new employee's gross wages as a tax benefit to the employer.

"What we're trying to do here is to show some confidence in our economy," said Don Dietrich, director of Idaho's Department of Commerce. "And maybe more importantly confidence in our employers."

The benefit would impact any employer that creates a new job. The new position would need to pay at least $12 an hour in any county with an average unemployment rate over 10 percent (that's currently 18 counties) and $15 an hour in any other county. If the employer is given a "positive" rating, meaning they've contributed more to the unemployment trust fund than their employees have drawn out, the employer could receive 6 percent of the employee's gross wages as a tax credit. A standard rating would generate a 4 percent credit. A lower rating would generate a 2 percent credit. The state tax commission would be the arbiter of the employer's rating.

"I'll give you an example," said Deitrich. "I know of a Treasure Valley construction firm with 15 employees. If they added a new worker at their average salary of $42,000, they would receive at $2,520 credit."

The bottom line to the state could cost Idaho's general fund $7.9 million but sponsors said the measure could generate $25.3 million in new tax revenue. The bill was sent with a unanimous "do pass" to the full House.