State tax credits
create 600 high-tech jobsThe survey pleases at least
one lawmaker analyzing Act 221
Act 221, the state's high-technology tax credit, helped create at least 600 high-tech jobs in 2002 that paid an average salary of $46,000, according to a survey of businesses that claimed the credit.
The information, provided yesterday by the Tax Department, gave another side of the controversial tax credit, which critics say has been abused by some businesses.
"The cost has been something that has been talked about and analyzed, but now we finally have some data on benefits," said Rep. Brian Schatz (D, Tantalus-McCully), chairman of the House Economic Development and Business Concerns Committee.
"To me this is incredibly positive news. It shows that the act is working," he added.
The 600 jobs are in alternative fuel industries, biotechnology, computer software, fiber optics, ocean sciences, and research and development.
The figures come from a survey by the Tax Department of businesses that claimed the tax credit.
The survey had a 60 percent response rate.
Information from the state Department of Business, Economic Development & Tourism shows there were 801 new high-tech jobs in 2002 with average annual salaries of $48,180.
The Labor Department job and wage data represent 12.2 percent and 18.1 percent increases, respectively. Statewide job growth in 2002 was 0.3 percent while wages rose 4.8 percent.
Movie and video production companies that qualified for Act 221 tax credits created at least 831 jobs in 2002 that paid an average salary of $7,000. But movies are usually one-time business ventures that were not what the law intended, said Kurt Kawafuchi, director of the Department of Taxation.
The Legislature enacted Act 221 in 2001 to encourage high-tech businesses in Hawaii to help diversify the state's economy. But Gov. Linda Lingle and others say the law is too liberal, allowing businesses not targeted by Act 221, like movies, to divert millions of dollars from state coffers.
The latest state tax figures show businesses claimed $26 million in tax credits in 2002.