Apprenticeship tax credit considered
Individuals participating in qualified apprenticeships could receive a tax credit under a bill heard by the Revenue Committee Feb. 4.
LB255, introduced by Lincoln Sen. Adam Morfeld, would provide a nonrefundable income tax credit for wages paid to an apprentice participating in a qualified program. Morfeld said the bill would help keep qualified workers in the state.
“My district faces chronic underemployment with the closure and downsizing of many companies in recent years,” he said. “All too often, I see my friends and family leave the state not because of a lack of jobs, but a lack of living-wage jobs.”
A qualified apprenticeship program must provide between 1,200 and 6,000 hours of on-the-job apprenticeship, certification by the U.S. Bureau of Apprenticeship and Training and joint administration by labor and management trustees.
Ron Sedlacek, representing the Nebraska Chamber of Commerce, testified in favor of the bill, saying that businesses in the state are in need of a skilled workforce.
“Typically, in the past, when we’ve surveyed our members about the barriers to doing business in the state, they’ve said things like regulation, taxation or the cost of health care,” he said, “But this year, overwhelmingly, they said it is the skills gap and how we’re going to address that.”
Michael LaPlant, a third-year electrician’s apprentice, also supported the bill, saying that apprenticeships provide invaluable experience.
“Through the program I’m getting hands-on work experience,” he said. “I’m out there working with the journeymen, building skills that I’m going to use for the rest of my life. You won’t get that in a typical college classroom.”
Calculation of the tax credit would equal one dollar for every hour worked by the apprentice during the taxable year, not to exceed the lesser of $2,000 or 50 percent of the total wages paid to the apprentice during the taxable year.
LB255 would decrease state revenue by $11.6 million in fiscal year 2016-17 and $12.8 million in FY2017-18.
The committee did not take immediate action on the bill.
