For the purposes of this subchapter, the term:
(1) "Abatement period" means from the effective date of this subchapter through the date when an abatement provided for in this subchapter is exhausted or forfeited, or otherwise expires in accordance with this subchapter.
(2) "BAS agreement" means a city-wide business activity strategy agreement between the District and a Qualified Social E-Commerce Company as specified in § 47-1818.03(b).
(3) "Disrupted corridor" means an area that is distressed due to the lack of amenities, transportation, or commerce, disrupted due to construction operations, or is otherwise determined by the Mayor to be a distressed or disrupted area.
(4) "New hire" or "newly hired" means an individual who was not employed by a Qualified Social E-Commerce Company before calendar year 2010 and was, or is:
(A) Hired to fill a position of indefinite duration consisting of a minimum work week of 35 hours for not less than 50 weeks per year;
(B) Not:
(i) A member of the board of directors of the Qualified Social E-Commerce Company;
(ii) A direct or indirect owner of more than 5% of the Qualified Social E-Commerce Company;
(iii) A spouse or dependent, as these terms are defined in section 152 of the Internal Revenue Code of 1986, approved October 22, 1986 (Pub. L. No. 99-514; 100 Stat. 2085), of any individual defined in sub-subparagraphs (i) and (ii) of this subparagraph; or
(iv) Hired under the conditions set forth in § 47-1817.03(b)(3); and
(C) Employed by a Qualified Social E-Commerce Company for at least 6 months in the District of Columbia.
(5) "New hire wage credit" means a credit equal to 10% of the wages paid during the first 24 calendar months of employment to a newly hired employee hired after December 31, 2009, and before January 1, 2016, accrued annually up to $5,000 per new hire per tax year, up to a maximum amount of the new hire wage credit cap.
(6) "New hire wage credit cap" means a ceiling of $15 million.
(7) "Qualified Social E-Commerce Company" means a company that:
(A) Is a Qualified High Technology Company;
(B) Is engaged primarily in the business of marketing or the promoting of retail or service businesses by delivering or providing members or users with access to discounts or other commerce-based benefits; and
(C) Hired at least 850 persons to work in the District of Columbia after December 31, 2009, and before January 1, 2012.
(8) "Qualified High Technology Company" shall have the same meaning as provided in § 47-1817.01(5).
(9) "Qualified real property" means real property located in the District of Columbia on which a commercial office building totaling no less than 200,000 square feet is constructed, or substantially rehabilitated, and equipped after June 1, 2012, and which is owned or leased by a Qualified Social E-Commerce Company for use as a primary corporate headquarters.
(10) "Real property" shall have the same meaning as provided in § 47-802(1).
(11)(A) "Related entity" means with respect to any Qualified Social E-Commerce Company any other person or entity that is a Qualified High Technology Company and is directly or indirectly controlling, controlled by, or under common control with the Qualified Social E-Commerce Company or is a successor to the Qualified Social E-Commerce Company by merger, consolidation, or operation of law.
(B) For the purposes of this paragraph, the terms "controlling," "controlled by," and "under common control with" mean the possession, directly or indirectly, or the power to direct, or cause the direction of, the management and policies of a Qualified Social E-Commerce Company, whether through ownership of voting securities, membership interests, or partnership interests by contract or otherwise, or the power to elect at least 50% of the directors, managers, or partners exercising similar authority with respect to the Qualified Social E-Commerce Company.
(12) "Resident" means an individual whose principal residence is located in the District of Columbia and who is subject to District of Columbia personal income tax, or is a new hire who becomes a resident within 180 days of his or her new hire start date.
(13) "Resident hiring factor" means the applicable percentage contained in this paragraph if a Qualified Social E-Commerce Company achieves, or has achieved, the following annual resident new hire proportion goals during calendar years 2010 through 2015:
(A) One hundred percent if at least 50% of new hires are residents in a calendar year.
(B) Seventy-five percent if at least 40% but less than 50% of new hires are residents in a calendar year.
(C) Fifty percent if less than 40% of new hires are residents in a calendar year.
(14) "Resident employment credit" means:
(A) The amount of $17.5 million, if a Qualified Social E-Commerce Company maintains the proportion of newly hired employees as residents at or above 50% during each one-year period, beginning October 1, 2014, through September 30, 2015, and continuing each year through to the end of the abatement period;
(B) The amount of $13.125 million, if a Qualified Social E-Commerce Company maintains the proportion of newly hired employees as residents at or above 40% during each one-year period, beginning October 1, 2014, through September 30, 2015, and continuing each year through to the end of the abatement period; and
(C) The amount of $9 million, if a Qualified Social E-Commerce Company maintains the proportion of newly hired employees as residents at less than 40% during any one-year period, beginning October 1, 2014, through September 30, 2015, and continuing through to the end of the abatement period.
(15) "STEM" means the fields of study in the categories of science, technology, engineering, and mathematics.
(16) "Unrelated entity" means any person or entity that is not a related entity.
(Oct. 9, 2012, D.C. Law 19-174, § 2(b), 59 DCR 8712.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
Law 19-174, the "Social E-Commerce Job Creation Tax Incentive Act of 2012", was introduced in Council and assigned Bill No. 19-755, which was referred to the Committees of the Whole and Finance and Revenue. The Bill was adopted on first and second readings on June 26, 2012, and July 10, 2012, respectively. Signed by the Mayor on July 19, 2012, it was assigned Act No. 19-398 and transmitted to both Houses of Congress for its review. D.C. Law 19-174 became effective on October 9, 2012.
(a) Subject to subsection (c) of this section and § 47-1818.04, the real property taxes imposed by Chapter 8 of this title with respect to qualified real property shall be abated up to the amount of the new hire wage credit, beginning in fiscal year 2016 and continuing until the new hire wage credit is exhausted or forfeited, or through fiscal year 2025, whichever occurs earlier; provided, that:
(1) The annual new hire wage credit amount accrued shall be determined as of the end of each calendar year from 2010 through 2015 by multiplying the total new hire wage credit earned by a Qualified Social E-Commerce Company in each calendar year by the annual resident hiring factor in the same calendar year. The total new hire wage credit amount shall be the aggregate of the new hire wage credit amount earned in each calendar year, subject to the new hire wage credit cap. The amount of any new hire wage credit earned in a calendar year shall be based on new hire information reported by a Qualified Social E-Commerce Company to the Office of Tax and Revenue in its corporate tax filing for each calendar year.
(2) Notwithstanding any other provision of this subchapter, no person shall claim an abatement pursuant to this section before October 1, 2015, and unless that person occupies qualified real property before April 1, 2017.
(3) If a Qualified Social E-Commerce Company leases or subleases any portion of the qualified real property, the new hire wage credit shall be applied only to a pro rata portion of the assessment on the qualified real property, which shall equal the ratio of the square footage of building area on the qualified real property that the Qualified Social E-Commerce Company occupies to the total square footage of building area that could be occupied.
(b) Subject to subsection (c) of this section and § 47-1818.04, the corporate income tax imposed on a Qualified High Technology Company by § 47- 1817.06 with respect to taxable income earned by a Qualified Social E-Commerce Company shall be abated up to the amount of the resident employment credit for 5 years commencing on the date that the Qualified Social E-Commerce Company occupies qualified real property (except, that in no instance shall such 5-year period begin before October 1, 2015), or until the resident employment credit is exhausted or forfeited as provided pursuant to this subchapter, or through fiscal year 2025, whichever occurs earlier. The resident employment credit amount available to be applied against the tax imposed by § 47-1817.06 shall be determined each tax year by applying the resident new hire proportions during the timeframe set forth in § 47-1818.01(14).
(c)(1) An abatement provided for in this section shall only be granted if:
(A) The Qualified Social E-Commerce Company continues for the duration of the abatement period to:
(i) Be a Qualified Social E-Commerce Company; and
(ii) Hires at least 50 new hires annually in the District of Columbia during each year of the abatement period, and certifies the new hires to the Department of Employment Services;
(B) The Qualified Social E-Commerce Company employs at least 1,000 persons in the District of Columbia during the period commencing on October 1, 2015, through the end of the abatement period, and certifies the employment to the Department of Employment Services;
(C) Within 180 days of [October 9, 2012], the Mayor certifies that the Qualified Social E-Commerce Company has entered into a BAS agreement in accordance with §§ 47-1818.03 and 47-1818.04;
(D) If the qualified real property is leased to the Qualified Social E-Commerce Company, the lease is for a period of at least 10 years and the owner of the real property passes the abatement through to the Qualified Social E-Commerce Company;
(E) The Qualified Social E-Commerce Company continues to occupy a qualified real property from its initial occupancy of the qualified real property throughout the duration of the abatement period;
(F) If the Qualified Social E-Commerce Company owns the qualified real property, the qualified real property is not during the abatement period:
(i) Sold, transferred, exchanged, or otherwise conveyed; or
(ii) Leased to an unrelated entity in excess of 50% of the gross floor area, unless the Qualified Social E-Commerce Company maintains occupancy of at least 200,000 square feet of gross floor area;
(G) If the Qualified Social E-Commerce Company leases qualified real property, the lease is not during the abatement period:
(i) Assigned to a third party, other than to a related entity; or
(ii) Subleased to an unrelated entity in excess of 50% of the gross floor area, unless the Qualified Social E-Commerce Company maintains occupancy of at least 200,000 square feet of gross floor area; and
(H) The Qualified Social E-Commerce Company has not filed a petition in bankruptcy in connection with the Qualified Social E-Commerce Company's business.
(2)(A) If a Qualified Social E-Commerce Company fails or ceases to comply with or achieve the provisions of paragraph (1)(A) through (C) of this subsection, any abatement provided for in this section shall not apply during the period of non-compliance.
(B) If a Qualified Social E-Commerce Company fails or ceases to comply with or achieve the provisions of paragraph (1)(D) through (H) of this subsection, any abatement provided for in this section shall immediately terminate and cease to be granted.
(Oct. 9, 2012, D.C. Law 19-174, § 2(b), 59 DCR 8712.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 19-174, see notes under § 47-1818.01.
(a) Within 180 days of [October 9, 2012], the Mayor shall enter into a BAS agreement with a Qualified Social E-Commerce Company and certify the agreement as required by § 47-1818.04 and submit it to the Council as required by § 47-1818.05.
(b) The Mayor shall ensure that the BAS agreement provides:
(1) That the Qualified Social E-Commerce Company will leverage its activities to assist retail businesses along disrupted corridors;
(2) For the coordination of the Qualified Social E-Commerce Company's offering of technology, marketing, social media, and other training opportunities for District of Columbia small businesses;
(3) For the development of engineering-related programs to recruit, train, and retain software developers in the District of Columbia; and
(4) For the Qualified Social E-Commerce Company's participation in hiring STEM students as part of the Summer Youth Employment Program established pursuant to § 32-241.
(c) Within 365 days of Council approval of the BAS agreement, as required by § 47-1818.05, and annually thereafter during the term of an abatement granted pursuant to this subchapter, the Mayor shall submit a report to the Council on each BAS agreement approved by the Council detailing the level of compliance under each BAS agreement.
(Oct. 9, 2012, D.C. Law 19-174, § 2(b), 59 DCR 8712.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 19-174, see notes under § 47-1818.01.
(a) Within 180 days of [October 9, 2012], the Mayor shall certify that the Qualified Social E-Commerce Company and the District have executed a BAS agreement.
(b) The Mayor shall certify to the Office of Tax and Revenue the identity of each Qualified Social E-Commerce Company for which eligibility for an abatement pursuant to this subchapter has been verified by the Mayor and shall provide a description of the qualified real property that is to receive an abatement and the date on which the abatement shall commence.
(Oct. 9, 2012, D.C. Law 19-174, § 2(b), 59 DCR 8712.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 19-174, see notes under § 47-1818.01.
(a)(1) Within 180 days of [October 9, 2012], the Mayor shall submit each BAS agreement, along with proof of the certification required by § 47- 1818.04(a), to the Council for its approval.
(2) If no proposed resolution of disapproval is filed with the Secretary to the Council within 14 days of the receipt by the Council of the BAS agreement, the BAS agreement shall be deemed approved.
(3) If a proposed resolution of disapproval is filed with the Secretary to the Council within 14 days of receipt by the Council of the BAS agreement, the Council may approve or disapprove the BAS agreement by resolution within 30 days of the receipt of the BAS agreement. If the Council neither affirmatively approves or disapproves the BAS agreement within 30 days of the receipt by the Council of the BAS agreement, the BAS agreement shall be deemed approved.
(b) Notwithstanding the requirements of this section, an abatement provided pursuant to § 47-1818.02 shall not be contingent upon the Council approval, or disapproval, of the BAS agreement.
(Oct. 9, 2012, D.C. Law 19-174, § 2(b), 59 DCR 8712.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 19-174, see notes under § 47-1818.01.
A Qualified Social E-Commerce company that utilizes, or is the beneficiary of, any of the following tax abatements, exemptions, or waivers during the abatement period shall not be eligible for the abatements pursuant to § 47- 1818.02, and further, the utilization of, or being the beneficiary of, the abatements provided for in § 47-1818.02 shall disqualify a Qualified Social E-Commerce Company from eligibility for any of the following tax abatements, exemptions, or waivers:
(1) The real property tax abatement for certain commercial properties provided in § 47-811.03.
(2) Earning and allowance of wage tax credits against the tax imposed by § 47-1817.06, as provided in § 47-1817.03, during calendar years 2010 through 2015, unless the amount of such credits earned exceeds $15 million, in which case the credit amount in excess of $15 million may be allowed as a credit against the tax imposed by § 47-1817.06, as provided in § 47-1817.03.
(3) The waiver of corporate income tax on a Qualified High Technology Company for 5 years from the date of commencing business as provided in § 47- 1817.06(a)(2)(C).
(Oct. 9, 2012, D.C. Law 19-174, § 2(b), 59 DCR 8712.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 19-174, see notes under § 47-1818.01.
Notwithstanding any other provision of law, the requirements of Subchapter X of Chapter 2 of Title 2 pertaining to government-assisted non-construction projects shall not apply to a Qualified Social E-Commerce Company receiving a benefit pursuant to this subchapter; specifically, § 2-219.03(e)(1), pertaining to government-assisted non-construction projects, and § 2- 219.03(e)(1C), pertaining to hiring and reporting requirements in government-assisted non-construction projects.
(Oct. 9, 2012, D.C. Law 19-174, § 2(b), 59 DCR 8712.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 19-174, see notes under § 47-1818.01.
The Mayor may delegate the functions vested in him by this subchapter to an appropriate executive office, agency or department.
(Oct. 9, 2012, D.C. Law 19-174, § 2(b), 59 DCR 8712.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 19-174, see notes under § 47-1818.01.
