BILL NUMBER: S3694
SPONSOR: SANDERS
 
TITLE OF BILL:
An act to amend the tax law, in relation to establishing the work oppor-
tunity tax credit
 
PURPOSE OR GENERAL IDEA OF BILL:
To provide a state tax credit for small businesses in order to incentiv-
ize the hiring of long term unemployed persons.
 
SUMMARY OF PROVISIONS:
Section one of the bill amends section 210-B of the tax law by adding a
new subdivision 49, which establishes the work opportunity tax credit.
It provides that a taxpayer shall be allowed a credit of two thousand
four hundred dollars for each long term unemployed person hired during a
taxable year. The credit is applicable to businesses that have fifty or
fewer employees. A "long term unemployed person" is defined as an indi-
vidual who has been a resident of New York for three years immediately
preceding hiring and who, prior to being hired by the business eligible
for the credit, had been unemployed and receiving public assistance for
six consecutive months or more, and is retained for full-time unemploy-
ment by such business for at least one year.
Section two amends subparagraph (B) of paragraph 1 of subsection (i) of
section 606 of the tax law by adding a new clause to establish the work
opportunity tax credit.
Section three amends section 606 of the tax law by adding a new
subsection (ccc), which establishes the work opportunity tax credit. It
provides that a taxpayer shall be allowed a credit of two thousand four
hundred dollars for each long term unemployed person hired during a
taxable year. The credit is applicable to businesses that have fifty or
fewer employees. A "long term unemployed person" is defined as an indi-
vidual who has been a resident of New York for three years immediately
preceding hiring and who, prior to being hired by the business eligible
for the credit, had been unemployed and receiving public assistance for
six consecutive months or more, and is retained for full-time unemploy-
ment by such business for at least one year.
Section four establishes that this act shall take effect immediately and
apply to taxable years beginning on and after January 1, 2020.
 
JUSTIFICATION:
As our economy continues to recover from the Great Recession, the long-
term unemployment rate has remained unacceptably high. Studies across
the board show that those who have been unemployed for a longer period
of time have a much harder chance of landing that next job. Current
statistics from the U.S Bureau of Labor reflect that the number of long-
term unemployed persons remains at levels more than twice as high as
those prior to the Great Recession. The problem is far-reaching with
national unemployment rates revealing that despite recent job growth,
the long-term unemployed continue to make up approximately 30W of the
unemployed in all age and education ranges.
At the same time, studies have shown that one of the keys to economic
growth lies within small businesses. The growth of small businesses is
critical to ensuring continued innovation and opportunity, all the while
diversifying our economy. Small businesses are the engine behind job
expansion and a strong economy.
This legislation aims to address two issues: long-term unemployment, and
small business growth. By providing a tax credit to small businesses for
each long-term unemployed individual they hire and retain as a new
employee, this bill will ultimately spur job creation, provide an added
incentive to hire an individual who has had more difficulty finding work
than others, and provide much-needed tax relief to small, businesses.
 
PRIOR LEGISLATIVE HISTORY:
2017: S.1517 REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
2018: S.1517 REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
 
FISCAL IMPLICATIONS:
The total amount of the state tax credit is capped at $15 million in the
aggregate in a taxable year beginning January 1, 2020.
 
EFFECTIVE DATE:
This act shall take effect immediately and apply to taxable years begin-
ning on and after January 1, 2020.

Statutes affected:
S3694: 210-B tax law, 606 tax law, 606(i) tax law, 1511 tax law