House OKs bill to cut taxes for businesses

COLUMBIA -- A bill that aims to create jobs by providing tax breaks to small businesses flew through the state House on Tuesday.

House members wasted little time giving their approval to the "2005 Jobs Creation Act," which reduces the number of jobs a business has to create to qualify for the tax credits from 10 to two.

"It's high time small business was a priority for our state," said House Speaker Pro Tem Doug Smith, R-Spartanburg.

"Over the last two or three years, we've had a lot of small business owners say they appreciate what we've done for big business, but not to forget about them. Now, by creating two jobs or more, they're in."

Businesses in more developed counties can get a job tax credit of up to $1,500 for creating two or more jobs, while those in the least-developed could qualify for up to $8,000.

Also, the credit applies to all jobs created in distressed counties, while some jobs -- such as retail, service and some

professional -- do not qualify in more affluent counties.

The bill also would provide a 25-percent credit against corporate and individual income tax for investments in qualified businesses.

"This is good for Spartanburg because the credits may benefit some business that wants to locate there," said Rep. Phil Sinclair, R-Woodruff. "But ultimately it's good for the whole state."

Rep. Scott Talley, R-Spartanburg, called the bill a good first step. But he said a business that creates two minimum wage jobs qualifies for the same tax break as a company that creates higher paying jobs, something he hopes to rectify.

Talley said he is working on a change that would require the jobs to pay at least the per capita income of the county in which they are created.

"We're not going to raise the wealth in this state unless we address this issue," Talley said.

Will Folks, spokesman for Gov. Mark Sanford, praised the House for moving so quickly on economic development issues.

He also urged the House to move as quickly to push through Sanford's proposal to lower the state income tax from 7 percent to 4.75 percent.

"We think the biggest thing we can do to create jobs in our state is lowering the income tax rate, which the House picked up and started moving forward right out of the gate as well," Folks said.

"The House passed this critical economic development bill last year, and they've made it a top priority again this session."

The House will give third reading to the bill today, a formality, and send it on to the Senate.

State Sen. John Hawkins, R-Spartanburg, said the bill would receive a warm welcome.

"I certainly will support it because we need to do everything we can to help small businesses and spur growth," Hawkins said.

"In my district, we've had some very significant closings and we need to do everything we can to increase job opportunities for our citizens."

Robert W. Dalton can be reached at 562-7274 or bob.dalton@shj.com.

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