Commerce Committee Approves Apprenticeship Tax Credit Expansion
The General Assembly’s Commerce Committee unanimously approved legislation March 7 allowing small and midsized companies to access the state’s manufacturing apprenticeship tax credit.
SB 98 opens the credit, an important workforce development tool, to manufacturers structured as S corporations, limited liability companies, and limited liability partnerships, collectively referred to as pass-through entities.
Under current law, this tax credit can only be applied to the corporation tax.
Connecticut’s critical manufacturing sector has faced a shortage of skilled workers, now magnified by the pandemic, for years as retirements eroded a predominantly older workforce.
The sector is also significantly impacted by the state’s current workforce crisis.
Connecticut’s labor force—the number of employed residents plus those actively looking for work—has fallen by 92,000 people since February 2020, more than 10 percent of the national decline.
At the same time, there are 110,000 job openings in the state, with manufacturing accounting for at least 10 percent of those unfilled positions.
SB 98 lets small and midsized companies offset the cost of training for new employees.
The bill will help address a growing demand for workers and put smaller companies on an equal playing field with larger companies.
More than 30 manufacturers, chambers of commerce, and industry associations testified in support of SB 98 at the committee’s March 7 meeting.
‘Companies Can Thrive’
Committee co-chair Sen. Joan Hartley (D-Waterbury) noted that “this is hopefully the year” the legislature can get this bill across the finish line and on the governor’s desk for his signature.
The committee’s newest member, co-chair Rep. Jeff Currey (D-East Hartford), said the bill “is another way in which companies can thrive in the state of Connecticut.”
Manufacturing in Connecticut represents about 10 percent of the state’s workforce and in 2020 generated $15.4 billion in wages.
Many companies noted in their testimony that the credit is not only needed to offset training costs, but also the lost productivity of mentors.
In an environment where there is a huge labor shortage, pulling someone away from their job to train apprentices is becoming increasingly less feasible.
The bill lets small and mid-sized manufacturers take a tax credit up to $7,500 maximum or 50 percent of actual wages, whichever is less, assuming they meet program requirements.
SB 98 now goes to the Finance, Revenue, and Bonding Committee, which has an April 7 deadline.
For more information, contact CBIA’s Ashley Zane (860.244.1169) | @AshleyZane9.
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