Senate File No. 619, provides a mechanism for reducing the unemployment insurance tax rates for employers for calendar years 2014 and 2015 by reducing the base rate component of the tax. There are two major components of the unemployment tax rate. The “base rate” component paid at the same rate by all unemployment tax paying employers and the experience rating component which is a variable rate based on an employer’s unemployment claims experience. There is also a special assessment levied against the tax otherwise payable dependent on the trust fund balance. The base rate is determined by a calculation involving the balance in the unemployment trust fund that is used to pay unemployment benefits and total wages paid in covered employment.
Section 1 provides for a possible (and under current projections a likely) reduction in the base rate component by altering the base rate calculation. Section 1 provides for a .1 percent base rate in calendar 2014 if the unemployment trust fund balance on September 30, 2013 is more than $800,000,000 and for calendar year 2015 if the balance on September 30, 2014, is more than $900,000,000.
Without the amendment in Section 1 the base rate for 2014 is projected to be .5 percent and the base rate for 2015 is projected to be .2 percent. This amounts to a projected tax reduction for employers in 2014 of $290,000,000 and in 2015 of $49,000,000.
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