The implementation of HB398 is expected to have significant implications for state laws related to taxation and labor markets. By instituting a job creation tax credit, the bill could lead to an increase in the number of full-time jobs within the state, thereby potentially decreasing the unemployment rate. It aims to stimulate the hiring of workers who had been laid off and to attract new industries necessary for diversifying Hawaii's economy. The state, being one of the few that lacks such a tax incentive, could see a positive shift in its regulatory and economic landscape.
Summary
House Bill 398 aims to address the economic challenges faced by Hawaii, particularly in the wake of the COVID-19 pandemic. The bill proposes a job creation income tax credit that is designed to encourage employers to boost hiring by offering financial incentives. The credit amount is set at $3,000 for each new full-time employee hired in a qualified position for each of the first three years of employment. This initiative seeks to counteract the labor shortages faced by businesses and to promote economic recovery through increased employment opportunities.
Contention
While supporters of HB398, including many business advocates, view the tax credit as a much-needed tool for economic recovery, there may be concerns regarding its long-term sustainability and effectiveness. Critics could argue that tax credits may not guarantee job creation without addressing underlying factors affecting Hawaii's economy, such as high living costs and limited industry diversity. Furthermore, the criteria for what constitutes a qualified employment position may also invite scrutiny regarding its adequacy in ensuring that the jobs created are beneficial and sustainable.
In personal income tax, further providing for classes of income and for special tax provisions for poverty and providing for alternative special tax provisions for poverty; in corporate net income tax, further providing for definitions, for imposition of tax, for reports and payment of tax, for consolidated reports and for manufacturing innovation and reinvestment deduction; in realty transfer tax, further providing for transfer of tax; in tax credit and tax benefit administration, further providing for definitions; in entertainment production tax credit, further providing for definitions, for credit for qualified film production expenses, for carryover, carryback and assignment of credit and for limitations; in Pennsylvania Economic Development for a Growing Economy (PA EDGE) tax credits, providing for biotechnology; in neighborhood assistance tax credit, further providing for tax credit and for grant of tax credit; providing for expanded neighborhood improvement zones; in Pennsylvania Child and Dependent Care Enhancement Tax Credit Program, further providing for credit for child and dependent care employment-related expenses; providing for Public Transportation Trust Fund; and, in general provisions, further providing for underpayment of estimated tax, for method of filing and for allocation of tax credits.
Individual income tax: credit; research and development credit for certain small employers; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 717.