Two states, two incentive bills

State legislators in Georgia and Maryland recently introduced bills that would grant substantial tax benefits to businesses and individuals that telework. But the similarities stop there. 

The Georgia bill (House Bill 1374) would grant a tax credit of up to $500 per employee, per year for five years to offset “eligible ongoing telework expenses” such as fees for broadband and telephone service. Companies could get an up to $5,000 tax credit to offset the one-time costs of setting up a home office. The size of the credit is tied to the number of days an employee teleworks per month: five days, 25%; 16 days or more, 75%; 18 days or more, 100%, if the employee lives in a “Tier 1 or Tier 2 county” or Metro Atlanta. 

But to get the credit, companies need to jump through hoops. They must create a “workforce profile” identifying which jobs can be teleworked and for how many days per week; the total number of teleworkers and its potential impact on the employer’s employee-to-commuter trip ratio; and the level of technology necessary to support telework jobs. Employers must prepare a program business case that identifies “cost-effective investments” that would allow more telework jobs, and a cost-benefit analysis measuring potential cost savings in space reduction, reduced employee turnover and increased productivity. They also must identify cost-effective investments that would mitigate barriers to telework.

Georgia employers will also need to create a written program that lays out the goals and operating procedures of the program, its budget, management structure, operating rules, eligibility requirements, remote work safety and security, equipment ownership and responsibilities – and set up and complete a 4- to 8-week pilot program designed to evaluate whether the plan actually works. 

While the Georgia bill would allow companies to take a 100% tax credit on the cost of all this (not exceeding $40,000), the question is how many will bother. And how long will the process take? And whether there are enough telework consultants in Atlanta area to handle all the work.

But it doesn’t look like those questions will get answered any time soon. The bill most likely won’t be passed this session anyway, given the state assembly is busy fighting over redistricting and a constitutional amendment to ban gay marriage, according Cathy Woolard, a lobbyist with Georgia’s Technology Leadership Coalition. Woolard says a few provisions are also being added to the bill, such as giving individuals tax credits for employing computer security. Also, it looks like Georgia will cap the amount spent per year at $1 million for the first year or two.

In contrast, the Maryland legislation (House Bill 1101) is short and sweet. Employers may take a tax credit of up to 25% of the costs incurred in deploying telework, not to exceed $5,000 annually. The bill sets aside $100,000 to be spent in 2005; $175,000 in 2006; and $250,000 in 2007. To claim the credit, employers fill out a form with contact information, number of teleworkers, the amount of expenses incurred and the amount of credit sought by the employer.

“We try to keep it simple,” says State Sen. Rob Garagiola, who authored the Senate version of the bill. He adds that issues of accountability can be handled by the state comptroller’s office. “They can put something together to ensure the criteria is met,” he says.

Garagiola has also introduced a bill mandating the state of Maryland allow eligible state employees to telework, which includes specific target percentages modeled after the federal law. 

What’s more, the Maryland assembly is expected to vote on both bills before session ends April 11. “That’s the hope,” Garagiola says.