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S 5644

Establishes a MWBE or SDVOBE subcontractor tax credit

2025 Regular Session Introduced by Jamaal Bailey

Bill S 5644 offers a tax credit for subcontractors that are MWBEs or SDVOBEs, boosting their competitiveness in state contracts and promoting economic diversity.

REFERRED TO BUDGET AND REVENUE
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Bill Summary · S 5644

Summary of Bill S 5644: MWBE or SDVOBE Subcontractor Tax Credit

Bill Number: S 5644
Title: Establishes a MWBE or SDVOBE Subcontractor Tax Credit
Status: Referred to Budget and Revenue
Introduced: February 26, 2025
Classification: Bill

Purpose and Intent

Bill S 5644 aims to promote economic growth and support small businesses by establishing a tax credit for subcontractors that are either Minority and Women-Owned Business Enterprises (MWBEs) or Service-Disabled Veteran-Owned Business Enterprises (SDVOBEs). The intent of this legislation is to enhance opportunities for these businesses in government contracting and procurement processes, thereby fostering diversity and inclusion within the state's economy.

Key Provisions

  • Tax Credit Establishment: The bill proposes the creation of a tax credit specifically for businesses that qualify as MWBEs or SDVOBEs when they serve as subcontractors on state contracts.

  • Eligibility Criteria:

    • To qualify for the tax credit, subcontractors must meet the definitions and criteria established for MWBEs and SDVOBEs as defined by state law.
    • The credit will be applicable to a percentage of the subcontract amount, incentivizing prime contractors to engage with these diverse businesses.

  • Credit Amount: While the specific percentage or dollar amount of the tax credit has not been detailed in the current version of the bill, it is expected to provide a significant financial benefit to qualifying subcontractors.

  • Implementation Timeline: The bill does not specify an implementation date; however, it is currently under review by the Budget and Revenue committee.

Impact

Who Would Be Affected

  • Small Businesses: MWBEs and SDVOBEs will directly benefit from the tax credit, potentially increasing their competitiveness in bidding for state contracts.

  • Prime Contractors: Companies that engage MWBEs or SDVOBEs as subcontractors may also benefit from the tax credit, encouraging them to diversify their subcontracting practices.

  • State Economy: By supporting diverse businesses, the bill aims to stimulate economic growth and job creation within underrepresented communities.

Procedural Aspects

  • Current Status: As of February 26, 2025, the bill has been referred to the Budget and Revenue committee for further discussion and evaluation.

  • Related Legislation: This bill is related to S 9705 from the prior session, which may provide context or background for the current legislative efforts regarding MWBE and SDVOBE support.

Conclusion

Bill S 5644 represents a strategic effort to enhance the participation of minority and veteran-owned businesses in state contracting. By providing a tax credit for subcontractors, the legislation seeks to create a more equitable business environment and stimulate economic growth through increased diversity in procurement practices. Further developments will be monitored as the bill progresses through the legislative process.

Compiled from official sources — confirm details with the bill’s official record.

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