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Narrowed contractor credit for 100% employee-owned firms advances
Summary
SB 5 36, narrowed to offer a contractor gross receipts tax credit only to 100% employee-owned (ESOP) construction companies, passed the committee by voice vote; Department of Revenue staff said the narrowed scope should substantially reduce prior administrative and FTE needs.
Senate Finance and Claims approved SB 5 36, a contractor gross receipts–tax credit narrowly tailored to construction companies that are 100% employee-owned (ESOP). Sponsor Senator Greg Hertz said the measure responds to stranded prepayments of the contractor gross receipts tax faced by such firms.
Russ Christianson of the Department of Revenue explained how the credit would function as a nonrefundable credit against income tax liability or, for some firms, through an existing refund process tied to business personal property taxes and certain vehicle registration fees. Christianson told the committee that under the amended, narrower scope the expected administrative workload and FTE request would be substantially lower than for the earlier, broader version of the proposal.
Senators asked technical questions about how the credit would be claimed and carry-forward rules; staff explained that unused contractor gross receipts tax amounts carry forward under current law and could eventually roll to the general fund after five years if not used.
The committee moved to 'due pass' and the bill passed by voice vote; the clerk recorded no votes from Senators Mandeville and Fuller and indicated proxies were assumed 'yes.'
