Senate Bill 5515 - Business Tax Credit for New Employment Positions in the Hospitality Industry

Summary

Senate Bill 5515, State of Washington 67th Legislature, 2022 Regular Session, by Senators Dozier, Holy, and Padden, prefiled December 8, 2021 and referred to the Committee on Business, Financial Services & Trade. The act relates to encouraging economic growth by providing a state business tax credit for new employment positions in the hospitality industry, and adds a new section to chapter 82.04 RCW. Section 1 sets the credit at $275 for each qualified employment position created after July 1, 2022 in an eligible area, defines a qualified employment position as a permanent full-time position with annual wages exceeding the average annual wage for the county, and provides that no refunds may be granted. Section 3 sets an effective date of July 1, 2022.

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Full text

     S-3144.1

                               SENATE BILL 5515


     State of Washington       67th Legislature       2022 Regular Session

     By Senators Dozier, Holy, and Padden

     Prefiled 12/08/21. Read first time 01/10/22.    Referred to Committee
     on Business, Financial Services & Trade.




1        AN ACT Relating to encouraging economic growth by providing a
2    state business tax credit for new employment positions in the
3    hospitality industry; adding a new section to chapter 82.04 RCW;
4    creating a new section; and providing an effective date.


 5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:


 6       NEW SECTION.   Sec. 1.   A new section is added to chapter 82.04
 7   RCW to read as follows:
 8       (1) Subject to the limits and conditions in this section, an
 9   eligible person is allowed a credit against the tax due under this
10   chapter. The credit is based on qualified employment positions in
11   eligible areas. In order to receive the credit, the employment
12   activities must take place at a business within the eligible area.
13       (2)(a) The credit is $275 for each qualified employment position
14   created after July 1, 2022, in an eligible area. A credit is earned
15   for the calendar year the person is hired to fill the position, plus
16   the four subsequent consecutive years, if the position is maintained
17   for those four years.
18       (b) A credit may not be taken for hiring of persons into
19   positions that exist on July 1, 2022. A credit is authorized for new
20   employees hired for new positions created after July 1, 2022. New
21   positions filled by existing employees are eligible for the credit
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 1   under this section only if the position vacated by the existing
 2   employee is filled by a new hire.
 3       (c) When a position is newly created, if it is filled before July
 4   1st, this position is eligible for the full yearly credit. If it is
 5   filled after June 30th, this position is eligible for half of the
 6   credit.
 7       (d) Credit may be accrued and carried over until it is used. No
 8   refunds may be granted for credits under this section.
 9       (3) No application is necessary for the tax credit. The person
10   must keep records necessary for the department to verify eligibility
11   under this section.
12       (4) By December 1st of each year, the department must determine
13   eligible areas for the following calendar year. An area remains an
14   eligible area for three consecutive years from the year the area was
15   last determined to be an eligible area. Qualified employment
16   positions created prior to any calendar year in which an area is
17   later determined to be ineligible under this subsection continue to
18   earn credit as provided under subsection (2)(a) of this section.
19       (5) If at any time the department finds that a person is not
20   eligible for tax credit under this section, the amount of taxes for
21   which a credit has been claimed is immediately due. The department
22   must assess interest, but not penalties, on the credited taxes for
23   which the person is not eligible. The interest must be assessed at
24   the rate provided for delinquent excise taxes under chapter 82.32
25   RCW, must be assessed retroactively to the date the tax credit was
26   taken, and must accrue until the taxes for which a credit has been
27   used are repaid.
28       (6)   The   employment  security  department   must  provide  the
29   department any information needed by the department to verify
30   eligibility under this section.
31       (7) The definitions in this subsection apply throughout this
32   section unless the context clearly requires otherwise.
33       (a) "Accommodation services" means the provision of lodging or
34   short-term accommodations for travelers, vacationers, or others, and
35   includes hotels, casino hotels, resorts, motels, and bed and
36   breakfast inns.
37       (b) "Amusement and recreation services" means the operation of a
38   variety of attractions, such as mechanical rides, water rides, games,
39   shows, theme exhibits, refreshment stands, picnic grounds, golf
40   courses, country clubs, skiing facilities, marinas, fitness and
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 1   recreational sports centers, bowling centers, casinos, bingo halls,
 2   as well as the operation of other similar amusement and recreation
 3   attractions or facilities.
 4       (c) "Average annual wage for the county" is the average annual
 5   wage reported by the employment security department in its quarterly
 6   census of employment and wages for the calendar year prior to the
 7   year of employment.
 8       (d) "Eligible area" means a county in which the county
 9   unemployment rate is at least 25 percent greater than the statewide
10   unemployment rate.
11       (e) "Eligible person" means a person who in an eligible area at a
12   specific location is engaged in business activities.
13       (f) "Food services" means the provision of meals, snacks, and
14   beverages to customer order for immediate on-premises and off-
15   premises consumption and includes full-service restaurants, limited-
16   service restaurants, cafeterias, and snack and beverage bars.
17       (g) "Hospitality industry" means a business engaged in providing
18   accommodation services, food services, amusement and recreation
19   services, or any combination of such services.
20       (h) "Qualified employment position" means a permanent full-time
21   position for the eligible person in the hospitality industry with
22   annual wages exceeding the average annual wage for the county. If an
23   employee is either voluntarily or involuntarily separated from
24   employment, the employment position is considered filled on a full-
25   time basis if the employer is either training or actively recruiting
26   a replacement employee.
27       (i) "Unemployment rate" means the unemployment rate for the state
28   and counties provided by the employment security department in the
29   Washington state seasonally adjusted monthly employment report for
30   September of the prior year; however, for employment positions
31   created between July 1, 2022, and December 31, 2022, the monthly
32   employment report for April must be used.

33       NEW SECTION.    Sec. 2.    The provisions   of   RCW   82.32.805   and
34   82.32.808 do not apply to this act.


35      NEW SECTION.   Sec. 3.   This act takes effect July 1, 2022.

                                   --- END ---


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