An interim series aimed at highlighting lesser known Majority Coalition Caucus-led budget accomplishments in the 2015 & 2016 sessions
Washington is home to over 340,000 working-age veterans. Yet, according to the Census Bureau, our state has a higher veteran unemployment rate (6.3%) than the national average (5.4%).1
To improve this situation, the Legislature passed a Business and Occupation (B&O) tax credit for employers that hire unemployed veterans.2 The tax credit takes effect later this year, beginning Oct. 1, 2016.
Spearheaded by Sen. Steve O’Ban, of the 28th District (which contains the most veterans in the state), the legislation contains the three parameters of good tax policy: a clear intent statement and goal; incentives to reach that goal; and an expiration date with a policy review to see if the goal was achieved.3
The legislation states the policy objective is to reduce the number of unemployed veterans, with a 30% reduction goal. If this is achieved, the Legislature intends to extend the tax incentive beyond its expiration date.
Employer Incentives to Hire Unemployed Veterans
The mechanism to reduce the number of unemployed veterans is to provide a B&O tax credit to employers that hire unemployed vets on or after Oct. 1st, 2016. The credit is equal to 20% of the employee’s wages and benefits. To be eligible, the employee must have been an honorably discharged veteran who has been unemployed for more than 30 days and the employer must hire the veteran into a full-time position and the veteran must hold that job for at least six months.4
The incentive expires July 1, 2023. Employers only receive the credit if they hire an unemployed veteran, and the incentive is discontinued once the veteran leaves the job. An audit review will be conducted at the end of the incentive’s lifespan to determine whether the incentive has achieved the legislature’s goals.
If this incentive works as intended, Washington will make significant inroads in decreasing the number of unemployed veterans.
- Veteran Statistics, Washington (http://www2.census.gov/library/inforgraphics/2016/comm/vets/wa-vets.pdf) The latest ACS survey found almost 21,000 unemployed veterans in the state (out of 340,000 working age veterans).
- ESSB 6057 (2015), Part X of legislation (http://lawfilesext.leg.wa.gov/biennium/2015-16/Pdf/Bills/Session%20Laws/Senate/6057-S.SL.pdf )
- While final legislation was part of ESSB 6057, the concept and language came from SSB 5042, prime sponsored by Sen. O’Ban.
- An employer may reduce their B&O taxes by up to $1,500 per unemployed veteran hired.