Relating to the amount of the franchise tax incentive for certain small employers that provide health care benefits to employees.
Impact
The bill proposes a structure whereby small employers can subtract a percentage of the health care benefits costs from their taxable margin over three consecutive reporting periods. In the first year of providing health care benefits, a small employer could subtract 75% of the cost, followed by a 50% reduction in the second year, and a 25% reduction in the third year. This incentive could potentially lessen the financial burden on small employers as they transition to providing health benefits, aiming to stimulate more businesses to offer such benefits.
Summary
House Bill 1122 is aimed at amending the state's Tax Code specifically in relation to the franchise tax incentives available for small employers providing health care benefits to their employees. The bill seeks to provide a graduated tax benefit, allowing small employers who begin offering health care benefits additional subtractions from their taxable margin. This aims to encourage the establishment of health care benefits in small businesses, thereby promoting overall employee welfare and health care accessibility.
Contention
Debates around the bill may include differing opinions on the adequacy and effectiveness of these tax incentives in improving health care access for employees. Supporters might argue that this could significantly help small businesses compete with larger firms in providing comprehensive benefits, while critics might question whether the incentives are enough to offset the costs associated with providing health care or whether they sufficiently address the broader issue of health care costs in the state.