City of Tacoma expands job tax credits for 2024
City of Tacoma was the first municipality in Washington state to adopt job-creation tax credits to stimulate business growth and foster job creation. Since their launch in 1999, the job credits have expanded to provide more incentives for Tacoma businesses.
As of Jan. 1, 2024, Tacoma City Council increased those credits further to encourage the hiring of people with disabilities and to incentivize companies that produce green products or enhance green processes in the circular economy.
New Tacoma Work Opportunity Tax Credit decreases barriers
A $1,000 B&O tax credit is now available for employers that add a new position and fill that position with an individual with a physical or mental disability.
- The position can be full or part time but must offer at least the minimum wage calculated by the Washington State Department of Labor and Industries. (Effective Jan. 1, the state of Washington minimum wage is $16.28.)
- The tax credit does not limit or interfere with a business’s ability to receive the federal Work Opportunity Tax Credit (WOTC) for hiring individuals through the vocational rehabilitation referral.
“This new tax credit speaks to the City of Tacoma’s intention that every adult has an opportunity for a good job in Tacoma,” Economic Development Services Business Development Manager Patricia Beard said.
Family Wage Tax Credit gets greener
Businesses are eligible to receive $500 for each employee added to the Tacoma workforce each year for 5 years.
- Employees who qualify must earn at least $24.50 per hour plus benefits in 2024.
- The City B&O tax credit is taken each year for every new full-time job created. The only employee retention requirement is that the position be maintained for five years.
- The total City B&O tax credit is unlimited and applies to new and existing Tacoma businesses.
Once the hourly wage requirement is met, up to three additional incentives are available:
- An additional $250 per employee for each year for 5 years (total value $1,250/job) is available if: (1) a business provides international services, such as computer services, engineering, business consulting and other ventures that reach outside U.S. borders, and (2) the new job is located within an empowerment zone (areas of high poverty and unemployment), as defined by the Washington State Department of Revenue.
- An additional $500 per employee is available if the employee is a Tacoma resident.
- An additional $1,000 per employee is available if the position is a green job, which is defined as a position involved in the production of goods or provide services that benefit the environment or conserve natural resources. While the green jobs tax credit isn’t new, Beard said, it has been enhanced and refined since the adoption of Tacoma’s Green Economic Development Strategy last year.
In a nutshell, businesses can get a credit against their B&O tax of up to $2,250 annually when they expand their workforce in Tacoma.
More information about job tax credits is available on the City of Tacoma website.