Tax Relief

The Keizer invoice would give corporations a further $ 500 million tax break

The companies hardest hit by the pandemic would receive $ 500 million in government aid in 2022 for their unemployment insurance premium taxes (UI) introduced by Senator Karen Keizer (D-Des Moines) and passed by the Senate committee on Friday April 2nd with a strong bipartisan majority.

“Small businesses hurt in our state,” Keizer said in an April 2 Senate Democratic press release. “We took urgent action at the beginning of this session to provide immediate relief. Now is the time to look to the future and pave the way for our long-term recovery. This bill addresses the very unequal impact of the pandemic on our economy. ”

Senate draft 5478, largely supported by business groups, provides $ 250 million relief for employers in economic sectors that had to close due to public health measures in 2020 and 2021, including restaurants, hotels, Movie theaters, gyms and bowling alleys, retail stores and others, according to the press release. In the absence of legislative action, these companies will see their UI taxes spike in 2022 due to the large number of workers who received UI benefits during the pandemic. Under SB 5478, government funds would be used to minimize these tax increases.

Another $ 250 million would be used to minimize tax increases for other employers – those in sectors that did not have to close but still had a significant impact from the pandemic recession and would otherwise see large UI tax increases.

The relief would target the experience part of the UI tax calculation. When employers have a large number of workers receiving unemployment benefits, it increases their experience rate rating, resulting in higher taxes. The bill would lower the rating of the experience rates of affected companies. This would also have the secondary effect of lowering the social tax rate paid by all companies.

The first category of businesses would include the grocery store in Point Roberts, which was hit hard by the closure of the border with Canada.

This Washington corporate tax break would complement a historic step lawmakers took at the beginning of this session with SB 5061, which prevented UI tax increases due to the pandemic of $ 1.7 billion.

The 2021 legislative period is to be interrupted on April 25th.

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