Youngstown Daily Legal News

Tax credits proposed for firms hiring high school interns

TIFFANY L. PARKS
Special to the Legal News
Published: June 17, 2013

Having successfully campaigned for the creation of a tax credit for businesses that move into a vacant facility, Rep. Nan Baker has now turned her focus to companies that hire high school students.

House Bill 107, sponsored by Baker, R-Westlake, would establish a tax credit for companies that employ high schoolers in career exploration internships.

“The intent of this legislation ... is to bring students and businesses together to explore a mutual interest in career opportunities,” Baker said in recent sponsor testimony before the House Ways and Means committee.

“It encourages students to seek places of employment that match their career interest and businesses to employ high school students to allow them to explore those interests.”

In the previous legislature, Baker got a bill signed into law that established a nonrefundable tax credit for businesses that expands into vacant facilities and increase payroll.

HB 107 would authorize a nonrefundable tax credit for businesses that participate in the pilot career exploration internship program that equals 50 percent of the wages paid to a student intern, up to a $5,000 credit.

The bill caps the sum of all tax credits that could be issued under the program at $2 million.

“HB 107 offers an opportunity that creates a paid employment relationship between a student intern and a business in which the student intern acquires education, instruction and experience relevant to the student intern’s career aspirations,” Baker said.

“This is a program that is not part of the school day and no class credit is given. It is a student employee/employer negotiation with very little school involvement.”

In crafting the proposed legislation, Baker said she asked the Ohio Legislative Service Commission to explore Ohio’s current state-funded internship programs.

She said there are three such initiatives: the Ohio Co-op/Internship Program administered by the Ohio Board of Regents; the Third Frontier Internship Program administered by the Ohio Department of Development; and the registered apprenticeship programs administered by the Ohio Department of Job and Family Services.

Baker also noted other state-supported internship ventures such as the Architects Board Intern Development Program scholarship and said most of the internship programs are housed at state institutions of higher education.

“There are no internships that are at the high school level that offer the unique incentive that this bill offers,” she said.

“Most are coursework and in-class technical training along with course credit for out-of-classroom participation. The superintendents, business owners and career tech advisors that I have met with over the past several months support the incentive to allow our high school students to explore their career explorations through employment opportunities.”

HB 107 would be applicable to all businesses that are a sole proprietorship, a corporation for profit or a pass-through entity.

When a business applies to the Development Services Agency to participate in the program, the applicable student intern must be eligible to attend school in Ohio, be between 16 and 18 years of age or enrolled in grade 11 or 12 and have a cumulative grade-point average of at least 2.5 out of 4.0.

Businesses would have to employ interns for at least 20 weeks and for at least 200 hours of paid work and instruction.

In applying for the tax credit, Baker said companies would have to submit a signed statement by the student intern briefly describing the student’s aspirations and how the intern believes the career exploration internship may help achieve those aspirations.

Companies would also have to have a brief signed statement by a principal or guidance counselor at the intern’s school or, in the case of a home schooled student, an individual responsible for administering instruction to the student intern, acknowledging that the employment opportunity qualifies as a career exploration internship.

“This is the only involvement by the high school personnel,” Baker said.

If HB 107 is signed into law, businesses would be limited to no more than three of the tax credits in a calendar year.

Baker said the proposed tax credit would be provided to a business for their successful participation in the program.

“It is important to note that an unsuccessful exploration also has great value in that it provides the student an opportunity to know first hand that his/her career choice is not what he/she thought it was,” she said.

HB 107 is co-sponsored by Reps. John Adams, R-Sidney, Anne Gonzales, R-Westerville, Michael Henne, R-Clayton, and Gerald Stebelton, R-Lancaster.

The bill has not been scheduled for additional hearings.

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