The Hill

A Tax Credit for Healthy Workplaces

By Rep. Tom Rice (R-SC)

July 16, 2020

CLICK HERE to read the full op-ed.

A historic jobs boom came after the slowest economic recovery in U.S. history because tax reform made it easier to do business. President Trump and Congress are now in a position to repeat this success during our current downturn. We need a similar approach to reopening our economy amidst the COVID-19 pandemic, one that allows for a healthy and responsible reopening that safeguards Americans’ health and well-being.

Our workers and small businesses through no fault of their own were forced to shut down and stay home in order to slow the spread of COVID-19 while we expanded hospital capacity, testing, and explored potential treatments. We’ve made progress and now we need to reopen responsibly, which requires careful planning by workers and employers alike to keep the workplace, and customers, safe.

This means main street businesses may need to reconfigure their layouts to ensure proper social distancing, or to provide protective equipment to their employees who want to return to work. And it means government should make it as easy as possible to handle these unexpected costs—instead of raising taxes or adding new complicated policies that make it harder for our economy to thrive.

I am a tax attorney; I am also a survivor of coronavirus. I think it’s vital that every American has what they need to work and provide for their family while taking reasonable measures to stay healthy.

That’s why, alongside my colleagues on Ways and Means, I have proposed a Healthy Workplace Tax Credit that would invest in safe, healthy workplaces.

By making it easier for everyday Americans to observe basic safety precautions, we can prevent people from contracting coronavirus while growing worker and customer confidence. No one should feel “exposed” or “in danger” while going about daily life.

Here’s how it works: The bill creates a temporary tax incentive through the end of 2020 to help businesses defray costs for testing, personal protective equipment (PPE), and reconfiguring workplaces – and this goes for every type of business: from storefront to manufacturing plants; offices to health care facilities.

Through this credit, we encourage and enable our job creators to take the federal and state recommended steps to prevent the spread of COVID-19 in their workplaces. This helps businesses afford these costs so they can bring back their workers quickly while alleviating the fears of spreading the virus.

The refundable tax credit against payroll taxes for 50 percent of the costs incurred by the business for COVID-19 testing, PPE, disinfecting, extra cleaning and reconfiguring workspaces.

The credit is limited to $1,000 per employee for a business’s first 500 employees, $750 per employees for the next 500 employees, and $500 for each employee thereafter.

For example, a hardware store with 40 workers in Hartsville, S.C., seeks to resume providing jobs and services to its community—the question is how to do so safely?

In order to reconfigure their store to help maintain social distancing, provide adequate sanitation stations, and implement other protocols to ensure their workers are safe at work, they spend $60,000. These dollars go toward PPE, testing, disinfecting and plexiglass shields. That store would receive a $30,000 tax credit against its payroll taxes. If that credit exceeds the store’s employer side payroll tax obligations, the excess credit – or funds leftover – will be given back to the hardware store.

Congress has acted on a bipartisan basis to help our country fight this pandemic. We should work together to ensure this recession doesn’t come back to life. The Healthy Workplace Tax Credit is a smart tax policy that will keep our workers, our families, and our marketplaces, safe and healthy.

Want to read more on the fight against Coronavirus? Read our Coronavirus Bulletin here which contains our extensive FAQ about recent federal actions.