Tuesday, February 02, 2010
Chamber Supports Job Creation Tax Credit
The Maryland Chamber of Commerce joined a number of other business groups today in supporting Governor Martin O’Malley’s legislation to provide a tax credit to Maryland employers who hire an unemployed Maryland resident during 2010.
This bill, SB 106, would provide a $3,000 income tax credit to employers that hire an unemployed Maryland resident during calendar year 2010 into a full-time position that is new or has been vacant for at least 6 months. Employers would obtain certification for the credit by submitting required documentation to DLLR, and claim the credit when filing their income tax return. If the employee works less than a year the credit would be pro-rated. Total credit amounts are capped at $250,000 per employer and $20 million for the total program.
Vice President of Government Affairs Ron Wineholt outlined the Chambers position, and provided some additional feedback, today during a hearing in the Senate Budget & Taxation Committee. Here is the Chamber’s position statement that was submitted to the committee.
The Maryland Chamber of Commerce supports this bill with an amendment. We are appreciative of the Governor’s efforts to put Marylanders back to work. With over 200,000 residents currently unemployed, it is appropriate for the Governor and General Assembly to use every available means to promote job growth. There are many existing state programs that could expand the number of jobs in Maryland if they were allowed more funding, including road projects, BRAC infrastructure, R&D and biotech tax credits and DBED’s woefully underfunded loan and grant programs.
We would like this legislation to succeed. It may cause some employers who have an economic reason to expand their workforce to accelerate their hiring. However, employers must weigh the benefit of a one-time $3,000 credit against the ongoing costs of a new employee, as well as the paperwork, time and possible audits that would result from seeking a tax credit certification through DLLR. Therefore, we suggest that the hiring incentive be increased by raising the maximum credit amount to $5,000 per new hire, while retaining the overall spending cap of $20 million.
