Job development tax credits

# (A)

A business may claim a job development credit as determined by this section if the:

# (1)

council approves the use of this section for the business;

# (2)

business qualifies pursuant to Section 12-10-50; and

# (3)

business is a tire manufacturer that has more than four hundred twenty-five million dollars in capital invested in this State and employs more than one thousand employees in this State and that commits within a period of five years from the date of a revitalization agreement, to invest an additional three hundred fifty million dollars and create an additional three hundred fifty jobs in this State qualifying for job development fees or credits pursuant to current or future revitalization agreements; except that the business must certify to the council that the business has satisfied all minimum capital investment and job requirements identified in the revitalization agreements but not certified by the council to the department before July 1, 2001. The council, in its discretion, may extend the five-year period for two additional years if the business has made a commitment to the additional three hundred fifty million dollars and makes substantial progress toward satisfying the goal before the end of the initial five-year period. A business that represents to the council its intent to qualify pursuant to this section and is approved by the council may put job development fees computed pursuant to this section into an escrow account until the date the business certifies to the council that the business has satisfied the capital and job requirements of this section.

# (B)

# (1)

A business qualifying pursuant to this section may claim its job development credit against its withholding on its quarterly state withholding tax return for the amount of job development credit allowable pursuant to this section for not more than fifteen years. Job development credits allowed pursuant to subsection (C)(1)(a) through (d) of this section apply only to withholding on jobs created pursuant to a revitalization agreement adopted pursuant to this section and to the amounts withheld on wages and salaries on those jobs.

# (2)

A business that is current with respect to its withholding tax as well as any other tax due and owing the State and that has maintained its minimum employment and investment levels identified in the revitalization agreement may claim the credit on a quarterly basis beginning with the quarter subsequent to the council's certification to the department that the minimum employment and capital investment levels have been met for the entire quarter. If a qualifying business is not current as to all taxes due and owing to the State as of the date of the return on which the credit would be claimed, without regard to extensions, the business is barred from claiming the credit that would otherwise be allowed for that quarter.

# (3)

To be eligible to apply to the council to claim a job development credit pursuant to this section, a qualifying business must create at least ten new, full-time jobs as defined in Section 12-6-3360(M) at the project or projects described in the revitalization agreement.

# (4)

To the extent a return of an overpayment of withholding that results from claiming job development credits is not used as permitted by subsection (D), it must be treated as misappropriated employee withholding.

# (5)

Job development credits may not be claimed for purposes of this section with regard to an employee whose job was created in this State before the taxable year the qualifying business enters into a preliminary revitalization agreement.

# (6)

If a qualifying business claims job development credits pursuant to this section, it must make its payroll books and records available for inspection by the council and the department at the times the council and the department request. Each qualifying business claiming job development credits pursuant to this section must file with the council and the department the information and documentation they request respecting employee withholding, the job development credit, and the use of overpayment of withholding resulting from the claiming of a job development credit according to the revitalization agreement.

# (7)

Each qualifying business must furnish an audited report prepared by an independent certified public accountant that itemizes the sources and uses of the funds. The audited report must be filed with the council and the department no later than June thirtieth following the calendar year in which the job development credits are claimed, except when a qualifying business obtains written approval of council for an extension of that date. Extensions may be granted for good cause shown. The department shall impose a penalty pursuant to Section 12-54-210 for all reports filed after June thirtieth or the approved extension date, whichever is later.

# (8)

An employer may not claim an amount that results in an employee's receiving a smaller amount of wages on either a weekly or on an annual basis than the employee would otherwise receive in the absence of this chapter.

# (C)

# (1)

The maximum job development credit a qualifying business may claim for new employees is determined by the sum of the following amounts:

(a) two percent of the gross wages of each new employee who earns $6.95 or more an hour but less than $9.27 an hour;

(b) three percent of the gross wages of each new employee who earns $9.27 or more an hour but less than $11.58 an hour;

(c) four percent of the gross wages of each new employee who earns $11.58 or more an hour but less than $17.38 an hour;

(d) five percent of the gross wages of each new employee who earns $17.38 or more an hour; and

(e) the increase in the state sales and use tax of the business from the year of the effective date of its revitalization agreement pursuant to this section and subsequent years, over its state sales and use tax for the first of the three years preceding the effective date of this revitalization agreement.

# (2)

The hourly base wages in item (1) must be adjusted annually by the inflation factor determined by the Revenue and Fiscal Affairs Office.

# (D)

To claim a job development credit, the qualifying business must incur expenditures at the project or for utility or transportation improvements that serve the project. To be qualified, the expenditures must be:

# (1)

incurred during the term of the revitalization agreement, including a preliminary revitalization agreement, or within sixty days before council's receipt of an application for benefits pursuant to this section;

# (2)

authorized by the revitalization agreement; and

# (3)

used to reimburse the business for:

(a) training costs and facilities;

(b) acquiring and improving real estate whether constructed or acquired by purchase, or in cases approved by the council, acquired by lease or otherwise;

(c) improvements to both public and private utility systems including water, sewer, electricity, natural gas, and telecommunication;

(d) fixed transportation facilities including highway, rail, water, and air; or

(e) construction or improvements of real property and fixtures constructed or improved primarily for the purpose of complying with local, state, or federal environmental laws or regulations.

# (E)

# (1)

For purposes of subsection (C)(1)(a) through (d), the amount of job development credits a qualifying business may claim for its use for qualifying expenditures is limited according to the designation of the county as defined in Section 12-6-3360(B) as follows:

(a) one hundred percent of the maximum job development credits may be claimed by businesses located in counties designated as distressed or least developed;

(b) eighty-five percent of the maximum job development credits may be claimed by businesses located in counties designated as "underdeveloped";

(c) seventy percent of the maximum job development credits may be claimed by businesses located in counties designated as "moderately developed"; or

(d) fifty-five percent of the maximum job development credits may be claimed by businesses located in counties designated as "developed".

# (2)

For purposes of this subsection, the county designation of the county in which the project is located at the time the qualifying business enters into a preliminary revitalization agreement with the council remains in effect for the entire period of the revitalization agreement.

# (3)

The amount claimed by a qualifying business is limited by this subsection and the terms of the revitalization agreements. The business may use either the job development escrow procedure pursuant to revitalization agreements with effective dates before 1997 or the job development credit, or a combination of the two. For a business qualifying pursuant to this section, the council also may approve or waive sections of a revitalization agreement and rules of the council, in the council's discretion, to assist the business.

# (4)

The council shall certify to the department the maximum job development credit for each qualifying business. After receiving certification, the department shall remit an amount equal to the difference between the maximum job development credit and the job development credit actually claimed to the State Rural Infrastructure Fund as defined and provided in Section 12-10-85.

# (F)

A job development credit of a qualifying business permanently lapses upon expiration or termination of the revitalization agreement. If an employee is terminated, the qualifying business immediately must cease to claim job development credits as to that employee.

# (G)

For purposes of the job development credit allowed by this section, an employee is a person whose job was created in this State.