The proposed bill, SB1213, introduces a new tax credit for employers in cities or towns that have adopted a local minimum wage exceeding the state minimum wage, effective from taxable years beginning January 1, 2025. The credit, known as the Credit for Increased Hourly Labor Costs, allows employers to claim 5% of the difference between their actual hourly labor costs and the product of the total hours worked by employees multiplied by the state minimum wage. The total amount of credits available is capped at $5 million per calendar year for each city or town, and the credits are granted on a first-come, first-served basis.

Additionally, the bill mandates that the State Treasurer withhold an amount equal to one-twelfth of the total credits claimed from the Urban Revenue Sharing Fund distribution to the respective city or town, ensuring that the state is reimbursed for the credits claimed. The bill also includes provisions for co-owners of businesses to claim a pro rata share of the credit and allows unused credits to be carried forward for up to five years. Overall, the bill aims to provide financial relief to businesses facing increased labor costs due to local minimum wage laws while ensuring that the state does not incur additional fiscal impacts.

Statutes affected:
Introduced Version: 43-206, 43-222, 43-1079, 43-1166, 49-282, 42-5033, 42-5033.01, 41-2257, 41-2258, 41-194.01, 43-1079.01, 43-1088, 43-1089.04, 43-1167.01, 43-1175, 43-1072.02, 43-1074.02, 43-1075, 43-1076.01, 43-1077, 43-1078, 43-1083, 43-1083.02, 43-1162, 43-1164.03, 43-1183, 43-1073, 43-1082, 43-1085, 43-1086, 43-1089, 43-1089.01, 43-1089.02, 43-1089.03, 43-1164, 43-1165, 43-1181, 43-1074.01, 43-1168, 43-1170, 43-1178, 43-1073.01, 43-1081.01, 43-1083.03, 43-1084, 43-1164.04, 43-1164.05, 43-1184, 23-364, 23-363
Senate Engrossed Version: 43-206, 43-222, 43-1079, 43-1166, 49-282, 42-5033, 42-5033.01, 41-2257, 41-2258, 41-194.01, 43-1079.01, 43-1088, 43-1089.04, 43-1167.01, 43-1175, 43-1072.02, 43-1074.02, 43-1075, 43-1076.01, 43-1077, 43-1078, 43-1083, 43-1083.02, 43-1162, 43-1164.03, 43-1183, 43-1073, 43-1082, 43-1085, 43-1086, 43-1089, 43-1089.01, 43-1089.02, 43-1089.03, 43-1164, 43-1165, 43-1181, 43-1074.01, 43-1168, 43-1170, 43-1178, 43-1073.01, 43-1081.01, 43-1083.03, 43-1084, 43-1164.04, 43-1164.05, 43-1184, 23-364, 23-363