2010 State Job Creation Initiatives

Many states have proposed job creation initiatives to address the effects of the recession on state unemployment rates. A number of these initiatives involve state tax credits for creating new jobs. Other proposals include small business development, increased capital in local financial markets, changes to state development funds and investments in green energy. The following chart shows job creation initiative details for 19 states. 

For more information on state unemployment rates and unemployment insurance please visit: http://www.ncsl.org/?tabid=13308.

Updated May 11, 2010

State

Job Creation Initiative

Alabama

Income Tax Proposals:

  • Enacted: HB 260 provides an income tax deduction equal to 50 percent of the taxable income of each person hired who at the same time was either drawing state unemployment compensation or whose unemployment benefits had expired.
  • Failed: HB 84 would have provided an annual deduction to employers with fewer than 25 employees and to their employees who earn less than $50,000 per year for premiums paid as part of an employer-provided health insurance plan, subject to phase in.
  • Failed: HB 212 would have provided annual job income tax credits for certain business taxpayers in distressed or underdeveloped counties, or in counties with military installations. The amount would have ranged from $1,500 to $8,000, depending on the county’s classification. It would have been provided for certain, specified industries.

Failed: Back-to-Work Tax Credit: HB 163 would have offered businesses an income tax credit for each newly hired full-time employee who has been on the Alabama unemployment benefit rolls for at least three weeks. The amount would have varied based on the employee’s hourly wage: $500 for each employee earning at least $10.55, but less than $15 per hour; $1,000 for each employee earning at least $15, but less than $20 per hour; and $1,500 for each employee earning more than $20 per hour.

Failed: Targeted Job Creation Tax Credit: HB 90 would have allowed a $500 income tax credit for each new job created in the 25 counties having the highest annual unemployment rate. The credit would have been available in the year in which the job was created and for the next two years, provided that the job is still in place and that the employer has a net increase in the number of Alabama employees in each tax year in which the credit is claimed.

Arizona

Failed: Arizona Job Creation Act: HB 2250 would have established a new Arizona Job Training Program (AJTP), the Arizona Opportunity Fund (AOF), and the Arizona Quality Jobs Program (AQJP); restructured Enterprise Zones into a statewide Arizona Enterprise Development Program (AEDP) and expanded the type of businesses that qualify for tax incentives under the AEDP; reduced the Class 1 property assessment ratio from 20 percent to 15 percent over five years beginning in TY 2012; phased out the state equalization assistance property tax over three years beginning in TY 2011; decreased the corporate income tax rate from 6.968 percent to 5 percent over four years beginning in TY 2011; increased the corporate sales factor from 80 percent to 100 percent over two years beginning in TY 2015; and lowered the individual income tax rate by 10 percent over four years beginning in TY 2011.

California

Enacted: Home Buyer Tax Credit: AB 183 provides $200 million, split evenly between first-time home buyers of existing homes and purchasers of previously unoccupied homes, on a first-come, first-served basis. Buyers can receive income tax credits of up to $10,000 for homes purchased through December 2010, which they must use within three years of receiving the credit.

Enacted: Green Tech Tax Credit: SB 71 allows green technology companies to make sales tax-exempt purchases for their manufacturing equipment through the end of 2010. The program is capped at $100 million and will be administered by the state treasurer. The sales tax-free purchases would be authorized based on the extent to which the green company creates jobs, helps reduce greenhouse gases and pollution, or otherwise benefits the state.

Proposed: New Business Employee Tax Credit: AB 2617 would allow a tax credit of 15% of the wages paid or incurred during the 2010 to qualified taxpayers who first commence business on or after 2010.

Colorado

Failed: Credit for Rehiring Workers: SB 133 would have created a state income tax credit available to businesses that rehire workers who were laid off during 2009. The tax credit would have been available only to businesses that rehire their laid-off workers sooner than they would have without the tax credit and if the worker is employed for at least a year after being rehired. To claim the credit, businesses would have been required to submit an affidavit with their tax return stating that without the tax credit they would not have rehired workers.

Connecticut

Proposed (passed legislature, awaiting action from governor): Majority Leaders’ Job Growth Roundtable Initiative: HB 5435 would establish a $12 million bond program to fund pre-seed projects and authorizes tax credits for angel investments. Pre-seed funding includes, but is not limited to, funding for proof of concept projects. HB 5435 would also make changes to Connecticut’s job creation tax credits by: extending credit to businesses paying taxes against the personal income tax; reducing the minimum job creation requirement from 10 to one; changing the credit from 60 percent of wages withheld for income taxes to 15 percent of wages paid to new employees who earn at least 80 percent of the state median wage; limiting the maximum credit to $4,000 per year and reducing the credit term from five years to three years; and by increasing the total authorized credits from $10 million to $25 million.

Proposed: Small Business Assistance Program & Business Entity Tax Exemption: SB 1 would exempt certain businesses with annual net incomes of $50,000 or less from the $250 business entity tax for two years. SB 1 would also establish a program to provide loans and loan guarantees to companies with fewer than 50 employees and authorize up to $20 million in state general obligation bonding to fund it.

Delaware

Proposed: Jobs Incentive Fund: SB 194 would create a jobs incentive fund, to be managed by the Delaware Economic Development Office, that would prioritize export-based industries that diversify Delaware’s economy, create jobs with a minimum salary of $20,000, and promote clean tech innovation, manufacturing and deployment.

Proposed: Job Creation/Relocation Tax Credit: HB 380 proposed to create incentives for existing businesses to partner with the state in the effort to create new employment opportunities for Delaware citizens, and to stimulate the Delaware economy by expanding the tax base. A finder’s fee, a tool used commonly by businesses, is an arrangement by which an intermediary finds, introduces, and brings together parties to a business opportunity. This bill creates a tax credit program that would award each sponsor firm and each new business firm with a $500 annual tax credit per Delaware job created by the new business, with the tax credit available for three years. The program would require that the new business be brought to Delaware as a result of the efforts of the sponsor, and would specifically exclude those business, such as real estate agents, banks and commercial landlords, that already have an incentive to bring out-of-state business to Delaware.

Florida

Proposed (passed legislature, awaiting action from governor): Jobs for the Unemployed Tax Credit: SB 1752 would authorize a new credit for businesses that hire workers who have been unemployed for at least 30 days. The tax credit would be worth $1,000 per year for up to two years for each qualified employee hired. The program is capped at $5 million.

Georgia

Proposed (passed legislature, awaiting action from governor): Jobs, Opportunity and Business Success Act: HB 1023 would provide an income tax credit for angel investors; provide a $2,400 tax credit for businesses that hire and keep employed for 24 months people who have been receiving unemployment benefits the longest; eliminate the corporate net worth tax; reduce the capital gains tax from 6 percent to 3 percent; and phase out the sales tax deposit required of businesses. 

Hawaii

Enacted: Volunteer Internship Program: Promulgated through administrative rules, the Department of Labor and Industrial Relations is allowing unemployment insurance claimants to gain workforce training by interning at local businesses for up to 32 hours a week for eight weeks, while still receiving unemployment benefits. The program will continue through the end of December 2010, when the administration will reevaluate the program.

Failed: Job Creation Tax Credit: HB 2558 / SB 2711 would have offered employers a tax credit equal to the wages withheld for state taxes for each new, full-time, permanent position filled by a resident receiving unemployment benefits.

Failed: Construction and Renovation Tax Credit: HB 2559 / SB 2712 would have provided a 10 percent construction and renovation tax credit for hotels and resorts on the first $500 million spent on construction in each of the next three years.

Illinois

Enacted: Small Business Job Creation Tax Act: SB 1578 offers small businesses a $2,500 tax credit for each new hire they make in the next year. Qualifying employers are limited to those with 50 or fewer employees. Additionally, the measure includes a $50 million cap on the total amount of credits that can be awarded.

Proposed: Small Business Development Grant Fund: HB 4943 would create the Small Business Development Grant Fund. The fund would be used by the Department of Commerce and Economic Opportunity to make grants (i) to small businesses that commit to using the grant moneys to create additional jobs, (ii) to small businesses from outside of the state that commit to relocate within the state, and (iii) for individual projects that create 100 or fewer additional jobs.

Indiana

Enacted: New Employer Tax Credit: SB 23 provides a new employer tax credit for a corporation or pass-through entity that after Dec. 31, 2009, either locates or relocates the operations of a business enterprise in Indiana, incorporates or otherwise first organizes in Indiana, or expands its operation of a business enterprise in Indiana and employs at least 10 new qualified employees. It requires the Indiana Economic Development Corporation (IEDC) to approve taxpayers for the credit. It also sets the credit at 10 percent of the wages paid by the new Indiana business to qualified employees during a 24-month period. The bill permits a carry forward of the credit for nine years.

Kansas

Failed (vetoed by governor): Changes to the Promoting Employment Across Kansas Program: HB 2538 would have expanded the program enacted in 2009 in a number of ways. That program authorizes a diversion of employee withholding taxes under certain circumstances to qualified companies or third parties performing services on behalf of such companies. The measure would have included “expanding business units” among the companies eligible for consideration. The existing definition of the term “new employee” would have been expanded to include people “maintained” by qualified companies. The measure would have also relaxed a requirement that companies move existing facilities and jobs to Kansas from another state, allowing companies to qualify by maintaining employees of existing business units or by establishing new business units.

Maryland

Enacted: Job Creation Tax Credit: SB 106 creates a $5,000 state tax credit for Maryland employers who hire an unemployed resident. The credit is limited to $250,000 for each qualified employer. A total of $20 million is available for the program, allocated on a first-come, first-served basis.

Minnesota

Pending: Angel Investment Credit: SB 2892 / HB 3302 would encourage job creation by providing an angel investment credit and a business investment company credit for qualified businesses.

Mississippi

Enacted: Cut and Sew Job Creation Tax Credit: HB 1674 creates a nonrefundable credit against the corporate and personal income taxes for an enterprise owning or operating an upholstered household furniture manufacturing facility. A credit of $2,000 annually is allowed for each full-time employee in a new cut and sew job for five years.

Missouri

Proposed: Manufacturing Tax Incentives: HB 1675 would provide tax incentives for qualified manufacturing facilities or qualified suppliers that create or retain jobs in Missouri. A qualified manufacturing facility would be permitted to retain 50 percent of the withholding tax from retained jobs for a period of 10 years. A qualified supplier would retain all withholding taxes from new jobs for a period of three years (or for five years if the supplier pays wages equal to or greater than 120 percent of the industry average wage). The total aggregate amount of the retained withholding tax from this program would not be allowed to exceed $35 million per year.

Ohio

Enacted: Ohio Energy Gateway Fund: The governor launched this public-private partnership to expand access to capital to grow and sustain the fuel cell, solar, wind and energy storage industries. The fund contains $40 million, made up of $10 million from the existing Ohio Bipartisan Job Stimulus Plan and $30 million from federal ARRA funds. To receive money from the fund, companies have to raise a dollar-for-dollar match from private sources.

Proposed: Wind and Solar Power Generation Property Tax Exemption: HB 464 would eliminate the tangible personal property tax on power generation, for up to 20 years, for wind and solar facilities that begin construction in 2010, begin to produce energy by the end of 2010 and create Ohio jobs. The bill requires payments in lieu of taxes on the basis of each megawatt of production capacity of such facilities.

Proposed: Job Creation Tax Credit: HB 437 authorizes a nonrefundable tax credit against the personal income tax or the commercial activity tax for a business that leases or purchases commercial space that has been vacant for the preceding six months and employs at least 50 percent of its Ohio employees there.

Rhode Island

Proposed: Small Business Tax Credit: HB 7431 would provide a tax credit for small businesses that add new employees. A small business employing between five and nine employees and with gross sales less than $5 million per year would be allowed to claim a one-time tax credit of $3,500 for a new full-time employee hired within that tax year and maintained in the employment of the employer for a minimum of six consecutive months.

Virginia

Enacted: Governor’s Development Opportunity Fund: HB 380 requires criteria used in awarding grants and loans from the Governor's Development Opportunity Fund include job creation, private capital investment, and anticipated additional state tax revenue (expected to accrue as a result of the capital investment and jobs created). An amendment to the budget bill, HB 30 / SB 30 will more than double this fund by increasing the state commitment by $12.1 million.

Enacted: Enterprise Zone Grant Program Eligibility Changes: HB 555 changes eligibility for enterprise zone job grants. In areas with an unemployment rate that is at least one and a half times the state average positions paying at least 150 percent of the federal minimum wage and health benefits are now eligible. Currently, positions paying less than 175 percent of the federal minimum wage are not eligible for the job grants.

Enacted: Major Business Facility Job Tax Credit Changes: Current law provides a $1,000 tax credit for major business facilities that create at least 100 qualified full-time jobs. HB 624 / SB 472 would lower the threshold to 50 full-time jobs. In enterprise zones or economically distressed areas, the threshold would be lowered from 50 newly created jobs to 25.

Enacted: Permit Fee Waiver for Veterans: HB 262 / SB 455 requires state regulatory agencies to waive administrative fees for issuing a permit when the application is submitted by a veteran in connection with his or her establishment and operation of a small business.

Enacted: Green Jobs Tax Credit: HB 803 / SB 623 allows a $500 income tax credit for the creation of “green” jobs created in tax year 2010 and after. Each taxpayer is allowed a credit for up to 350 new green jobs and may qualify for the Enterprise Zone Grant program if the job is created in an enterprise zone.

Enacted: Technology Start-Up Capital Gains Exemption: HB 523 / SB 428 would exempt capital gains related to investment in a technology or science company within three years after start-up.

Failed: Renewable Energy Jobs Income Tax Credit: HB 1132 would have provided an income tax credit of $2,000 for each renewable-energy job created for the year after the job was created and for the two succeeding years, if it is still filled.