On June 13, 2016, the Department issued a partial denial for the high wage job tax credit. On June 30, 2016, the Taxpayer executed a formal protest with the Department on the partial denial. The Department’s partial denial included 33 employees that were found to be occupying jobs that were not new or newly created jobs and were referred to as “replacement’ jobs. At the time of the hearing, the protest was specific to 23 employees over 31 qualifying periods. The Department uses the replacement analysis to prevent employers from placing an employee in a vacated high-wage job and asserting entitlement to additional qualifying periods because the statutory limit is for four-qualifying periods for each new high-wage job created. The Taxpayer asserted that it satisfied all of the essential elements necessary to qualify for the credit. The Taxpayers main argument was that the Department went beyond its statutory authority by further scrutinizing the application employing that the parties by using the replacement analysis. The Hearing Officer determined that the analysis used is not beyond the authority of the Department. A tax credit must be narrowly construed and the Department must examine when the credit is claimed and if the job is newly created. The Hearing Officer determined that the Taxpayer did not prove that it was entitled to the credit for the employees in question. For the foregoing reasons, the Taxpayer’s protest is denied.
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