If an “A-list” exists nationally of state economic development policies this decade, Connecticut”™s 2006 tax credit for filmmakers gets a starring nod, with the incentives stirring up more than $300 million in economic activity last year.
A second tax break passed that year, benefiting companies that permanently relocate jobs to Connecticut, however, appears to be struggling to be mentioned even as an extra in corporations”™ tax credits.
As of late February, no company has claimed the new job creation tax credit passed in June 2006, according to the Connecticut Department of Economic and Community Development (DECD).
The tax credit applies to companies relocating to Connecticut that hire at least 50 new employees, allowing companies to claim 25 percent of the state income tax withheld from employees”™ wages over a five-year period.
Both tax credits were passed with equal fanfare in 2006. Whereas the film incentive is credited with luring major productions like the expected blockbuster Indiana Jones and the Kingdom of the Crystal Skull, its job-creation equivalent appears mostly to have been a bust.
That was hardly the expectation in August 2006, when Gov. M. Jodi Rell announced Harrison, N.Y.-based GlobeOp Financial would utilize the jobs credit to create 150 financial processing jobs in Hartford.
GlobeOp has yet to take the credit, and likely with good reason ”“ the company only officially opened the Hartford office last November and is still hiring toward its ultimate employment levels.
More recently, however, state officials mentioned the job-creation tax credit as an afterthought in Blue Sky Studios Inc. decision to relocate to Greenwich from White Plains, N.Y. And despite Fairfield County continuing to reinforce its status as a top employment center despite its high costs, the job-creation tax credit may as well have been written in invisible ink.
“Internally, it is something we are currently looking at,” said DECD spokesman Jim Watson. “We are looking at ways to best market the availability of the credits ”¦ Companies have been more inclined to take advantage of other forms of state assistance.”
Those incentives have included low-cost loans, tax credits for redeveloping urban and industrial properties, and sales and use tax exemptions for construction and other activities.
Meanwhile, Sen. John McKinney has filed a bill to strengthen the job-creation tax credit during the Connecticut General Assembly”™s short session already under way. McKinney”™s district includes Fairfield, Easton, Newtown and Weston.
The proposal, which is under consideration by the legislative commerce committee, calls for:
Ӣ opening the credit to limited liability companies, partnerships and other small businesses;
Ӣ allowing businesses to claim the credit for creating a single job;
Ӣ removing a $10 million annual program ceiling;
Ӣ making the credit automatic, subject to review by state agencies; and
Ӣ allowing small businesses that do not pay corporate taxes to apply the credit toward their personal income tax.
DECD has also had informal discussions with the Connecticut Business & Industry Association on ideas for strengthening the law.
