Ted Whitten, the owner of Ted’s Plumbing in Anniston, had no idea the Alabama Legislature approved a new tax credit for small businesses last month, but the plumber said every little bit helps.
“Any kind of tax credit is good, especially if it helps small business owners” he said. “This kind of break is beneficial especially with the economy being so slow since the 2008 recession. When it comes time to hire I will definitely take advantage of it.”
House Bill 36, signed into law by Gov. Robert Bentley in April, gives small businesses a $2,500 tax credit for every employee they hire making $40,000 per year or more. An additional $1,000 credit is also available for those who hire an unemployed veteran who has been discharged within the last two years.The sponsor of the bill, Rep. Kyle South, R-Fayette, said it’s an extension of an earlier $1,500 tax credit the state approved for businesses that hire someone making $10 per hour.
“This bill has the same requirements as the Employment Act of 2011” he said. “But takes it a step further for those people making higher wages.”
Alabama lawmakers in recent years have passed multiple tax credits intended to spur new hires, but economists aren’t so sure any one incentive can make a big dent in unemployment.
“Some folks will benefit from the credit but when you’re talking about $40,000 a year this is not a very significant motivation,” said Ken Grissom, director of the Jacksonville State University Small Business Development Center. “Obviously it will help. And those who are considering hiring should definitely take advantage of it. But I don’t know if it’s enough incentive to cause someone to take on an employee.”
Carla Thomas, a family practice physician in Anniston, agreed. She said that while anything benefiting small businesses is a great idea, she wouldn’t go out of her way to take advantage of the credit.
“It’s great for those who already want to hire,” she said, “but it wouldn’t make sense to hire someone just to get the tax credit.”
Rosemary Elebash, the Alabama state director for National Federation of Independent Business, sees the bill as a small step in the right direction for a problem that is twofold, according to surveys of the group’s members.
Click here to read the entire article posted May 14, 2016 – annistonstar.com