Alabama Senate Bill SB43

Alabama 2023 Regular Session

• Introduced: 3/7/23
• Refer: 3/7/23

Caption

Relating to tax credits; to provide a tax credit to Alabama employers for employees eligible under the federal Work Opportunity Tax Credit Program; and to allow for the adoption of rules.

Impact

The implementation of SB43 is set to have a significant impact on state law as it will amend the existing tax code to allow Alabama employers to benefit from a new financial incentive when hiring eligible employees. The provision of this tax credit aims to stimulate the local economy by enhancing employment rates, particularly focusing on individuals who may face barriers to entering the workforce. However, it is capped at a total of $10 million for each fiscal year, which may limit its overall impact and accessibility for some employers engaging in this hiring practice.

Summary

SB43 is an Alabama legislative bill that introduces a tax credit for employers who hire individuals eligible under the federal Work Opportunity Tax Credit Program. This bill aims to encourage businesses within the state to employ individuals from targeted groups, which is part of a broader federal initiative to enhance job opportunities for various demographics, including veterans and individuals receiving public assistance. The tax credit amount mirrors the federal credit up to a maximum of $1,000 per qualifying employee, promoting an additional incentive for Alabama employers to engage in community support through workforce development.

Contention

While the tax credit introduced by SB43 is generally viewed positively as a means to boost employment and bolster financial support for certain groups, there may be concerns regarding the fiscal implications for the state. Critics might argue that the cap on the total credits available could prevent broader economic stimulation and that the reliance on tax credits alone may not address underlying issues of unemployment. Furthermore, as it is non-refundable and non-transferable, the structure of the credit may not fully aid all potential applicants, particularly smaller businesses that often face more significant financial constraints.