Use of Federal Job Credit by DC Hotels

June 1, 1999

Businesses in the District of Columbia that employ District residents in census tracts with more than a 20 percent poverty rate in the 1990 census are eligible for a credit against federal tax liability of 20 percent of wages up to $15,000. The maximum credit for each employee is $3,000. The goal of this credit apparently is to increase employment of District residents and to encourage businesses to locate in poorer areas of the city.

A survey of hotels in the District identified 20 that appear to be in poverty tracts and should be eligible for the federal job credit for employing District residents. With the assistance of the Hotel Association of Washington, D.C., a survey was addressed to each of these hotels asking for information about the use of tax credits.