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House Bill 510 — Small Employer Incentive Act

House Bill 510 — Small Employer Incentive Act

Lindsay Atkinson
February 20, 2020

Bill description: HB 510 would extend the Idaho Small Employer Incentive Act by 10 years, until 2030. This program picks winners and losers in the economy by providing tax credits to some businesses at the expense of others.

Rating: -1

Does it violate the principle of equal protection under the law? Examples include laws which discriminate or differentiate based on age, gender, or religion or which apply laws, regulations, rules, or penalties differently based on such characteristics. Conversely, does it restore or protect the principle of equal protection under the law? 

HB 510 extends a section of Idaho law that provides some specified tax breaks to certain businesses, but not others. Not only does the bill extend the time period for incentives that discriminate against large businesses in favor of small ones, it also extends the time period for tax credits that some, but not all, small businesses are eligible for. 

This section of law includes income tax credits for certain capital investments, for certain property improvements, for new jobs, and a rebate for sales and use tax.

These carve-out tax breaks are supposed to end Dec. 31, 2020, but if this bill becomes law, they will instead end on Dec. 31, 2030, unless of course a bill is passed ten years from now to extend these breaks another ten years and so on. 


Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments? 

HB 510 extends the time period for which small businesses are eligible for the income tax credits and rebates offered via the Small Employer Incentive Act. Both tax credits and rebates reduce the impact of taxation on these businesses, even if it is an unfair advantage offered to them. 


Does it increase government redistribution of wealth? Examples include the use of tax policy or other incentives to reward specific interest groups, businesses, politicians, or government employees with special favors or perks; transfer payments; and hiring additional government employees. Conversely, does it decrease government redistribution of wealth? 

This bill extends the time period for tax credits, a form of wealth redistribution. Tax credits offered by this section of law are only available to small employers. For some tax credits, not all small businesses can qualify. For example, the tax credit for new jobs is only available to businesses that offer new employment positions at an hourly rate of $24.04 or more.

Thus, these tax credits represent a redistribution of wealth to only very specific groups. Instead of paying their fair share of taxes, certain small businesses get to pay less for using certain business practices that the Legislature finds more important than others. And all of the businesses and individuals that do not meet the requirements for these tax credits end up making up for them with their own tax dollars. 


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