The following issues are addressed in this edition of our newsletter:
New Job Tax Credits Available for Small Businesses: All
businesses in 22 counties qualify
32.9% Increase in Workers Comp Rejected By Dept. of
Insurance: Judge still to rule on matter
Workers Comp Advisory Board Appointed: Small businesses
have good representation
New Job Tax Credits Available for Small Businesses
All businesses in 22 counties qualify
Small businesses are for the first time being given a piece of the state’s economic incentive pie. In a September 1st meeting with The SC Small Business Chamber of Commerce, the S.C. Department of Revenue clarified its interpretation of the new Jobs Tax Credit law passed earlier this year. The news is particularly good for small businesses in the 22 counties of the state that are classified as “distressed” or “least developed”. However, certain types of businesses in the other counties are also qualified.
To see if your business qualifies for this economic incentive from the state, go to the summary of the Job Tax Credits at the end of this newsletter. This summary can also be found at http://www.scsbc.org/view_issue.asp?id=29.)
In the 22 counties designated as “distressed” or “least developed”, any business of fewer than 100 employees qualifies for Job Tax Credits for increasing their workforce by as little as two new net employees compared to the previous fiscal year. For each of these new employees the business can claim a tax credit between $2,500 and $8,000 depending on the county and how much the employees are paid.
The Small Business Chamber first proposed giving Job Tax Credits to all small businesses in rural counties to promote job growth. In a September 20, 2004, letter to the House Rural Ad Hoc Committee, the Small Business Chamber argued for lowering the number of new jobs created, in order to be eligible for Job Tax Credits, from 10 under the then current law to only one new job. The General Assembly officially reduced the number of new jobs needed to two in June of this year.
Small businesses should move quickly if they want to take advantage of Job Tax Credits because the incentive is tied average monthly employment during the entire fiscal year. The summary at the end of this newsletter gives contact information for questions. Consulting with a Certified Public Accountant is also recommended.
32.9% Increase in Workers Comp Rejected By Dept. of
Insurance
Judge still to rule on matter
Eleanor Kitzman, Director of the S.C. Department of Insurance, has disapproved the 32.9% average Workers’ Compensation rate increase proposed by the national Council on Compensation Insurance (NCCI). Kitzman found the proposed increase to be excessive and thus a violation of the law. If an Administrative Law Judge upholds her ruling, NCCI will either have to appeal to the court, file another rate hike request or do nothing.
The Small Business Chamber, which had formerly petitioned to intervene in the matter in order to fight against the rate hike, hailed decision as good news for the state’s small businesses. The Small Business Chamber was prepared to discredit the data used by NCCI to justify the large rate increase.
Workers Comp Advisory Board Appointed
Small businesses have good representation
The S.C. Department of Insurance has appointed 11 members to the Workers’ Compensation Advisory Board. The Board was created in this year’s state budget to provide oversight of the Workers’ Compensation Assigned Risk Plan Administrator (currently NCCI) and the Workers’ Compensation rating organization (currently NCCI). The Board is also charged with developing a report and recommendations by December 10, 2005, as to the tasks now performed by NCCI and if a new rating organization should be created to perform these tasks.
Appointed to this new Board are three small businessmen: Randy Pardee (Pardee’s Refrigeration & Air Conditioning), Jim Rabon (Collum Mechanical) and Keith Smith (Keith Smith Builders). These three men had previously served on the Small Business Chamber’s Workers’ Compensation Insurance Task Force. With only one exception, all the reform recommendations of this Task Force were adopted by the Legislature this past session including the formation of a Workers’ Compensation Advisory Board.