The Idaho legislature passed the Hire One Act during its 2011 session. It’s a tax credit aimed at creating jobs. Governor C.L. “Butch” Otter proposed the incentive program as part of his Project 60 initiative.
Here’s how it works:
The amount of each tax credit is based on a three-tiered system which is a rating from the Department of Labor. Positive-rated employers adding a job would get a refundable tax credit equal to 6 percent of the new employees’ annual wages. Standard-rated employers would get a refundable tax credit that’s 4 percent of the new employees’ annual wages. Deficit-rated employers would get a refundable credit equal to 2 percent of the new employees’ annual wages.
It also focuses on the hardest-hit counties in Idaho. Companies hiring employees in counties with less than 10 percent unemployment must pay at least $15 per hour. Companies hiring employees in counties with unemployment rates above 10 percent must pay at least $12 per hour. The new employee must work for nine consecutive months before the employer can claim the tax credit. The credit is claimed in the tax year when the new hire became qualified.
The incentive program has been heavily promoted by the Departments of Commerce and Labor. The Hire One Act even has its own Facebook page.
The Department of Labor and Division of Financial Management estimates the Hire One Act could end up costing $7.9 million general fund dollars. Still, the departments believe that cost will be offset by new tax revenue from the people who get jobs.
Because the program was created less than a year ago, it’s too early to tell how many companies used Hire One Act tax credits.
The program will sunset on December 31, 2013