States Consider UI Measures That May Affect Taxes, Filing


The vast majority of state legislatures, 45 of 50, are in session considering numerous aspects of public policy, many of which are related to payroll. Unemployment insurance compliance already has been affected by a few bills signed into law so far in 2017, and some bills that have been passed by state legislatures and that now are under consideration by governors also would affect unemployment insurance compliance if signed into law.

Since the start of 2017, many bills related to unemployment insurance have been signed into law. In South Dakota, the signing of H.B. 1097 caused the state to have two unemployment tax-rate schedules with which experienced-employer rates could be determined, starting with rates for 2018, up from one previously. In Wyoming, the signing of H.B. 171 allows employers delinquent in paying unemployment tax or filing unemployment tax and wage reports, effective July 1, 2017,  to in some circumstances avoid assessment of a penalty tax of 2 percent.

In North Dakota, a bill under consideration by the governor would significantly affect requirements for filing unemployment tax and wage reports and paying unemployment tax. The bill (H.B. 1296), if signed, would require employers, effective Jan. 1, 2018, to electronically file the reports. Electronic filing now is required for employers with at least 25 employees.

The North Dakota bill also would dramatically expand the requirement for electronic payment of unemployment tax, which now is in effect only for entities that pay unemployment tax on behalf of multiple employers, but which effective Jan. 1, 2018, would cover all employers and other entities paying unemployment tax. Employers may use the state’s online portal for unemployment tax compliance, Unemployment Insurance Employer Account Systems (UI Easy), to complete these electronic filing and payment requirements. The bill was submitted March 17 to Gov.  Doug Burgum (R) for review, and he likely is to sign it.

A bill under consideration by Kentucky’s governor would elaborate on the process for establishing an unemployment tax rate for a successor employer that had not been covered by the state’s unemployment law but that acquired all or part of the business of a predecessor employer that had been covered by the state’s unemployment law. The bill (H.B. 473) would, effective starting with tax rates determined for 2018, require such a successor within 45 days of employing personnel to file an application with the state to establish an unemployment account. Additionally, some questions on the application would help the state assess how much of the predecessor’s experience would be applicable in determining the successor’s rate.  

The Kentucky bill was submitted March 15 to Gov. Matt Bevin (R) for review, and he likely is to sign it.

An Arkansas bill that passed the state House on Feb. 15 and state Senate on March 20 and that soon is to be reviewed again by the House because of a Senate amendment would lower the state’s unemployment-taxable wage base to $10,000, effective Jan. 1, 2018, from $12,000, without adjusting the state’s schedule of unemployment tax rates. The amended bill (H.B. 1405) likely is to be agreed upon by the House and likely is to be signed by Gov. Asa Hutchinson (R).

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