Alabama Senate Passes Apprenticeship Tax Credit to Encourage Training

By Arthur Orr

On Thursday, the Alabama State Senate passed the Apprenticeship Tax Credit by Senator Arthur Orr (R-Decatur) to encourage companies to train apprentices The legislation provides a $1,000 tax credit to companies that train an apprentice for at least seven months in a tax year. Sen. Orr’s economic development bill is part of the Alabama Senate Republican 2015 legislative agenda. SB109 now goes to the House for consideration.

“According to the Brookings Institution, roughly 45% of jobs in the next decade will be middle-skill occupation jobs, which are jobs that require a high school diploma but not a college degree,” said Orr. “Sometimes a company may not have an immediate need to hire someone, but are willing to take on an apprentice. If you are a young person or an adult looking to retrain and switch careers, an apprenticeship can be the bridge you need to a steady job.”

Under the Apprenticeship Tax Credit Act, any worker could qualify as an apprentice, provided they meet minimum age standards for employment, which is 16 years of age in most Alabama counties. A company may claim the tax credit for a maximum of four years for each apprentice.

“I don’t believe that government can create jobs, but it can set policy that encourages companies to train individual with skills that will help that company and the employee,” remarked Orr. “This tax credit will encourage companies to train more people, which will lead to more job opportunities for the apprentices.”

States across the country, including other Southern states, already have apprenticeship training tax credits available. Conservative legislators at the federal level, like Sen. Tim Scott (R-South Carolina) have introduced similar legislation.