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Business Taxes Increase to Pay Unemployed

June 22nd, 2009 by flanews

Business owners will soon be paying more to help keep up with the cost of double digit unemployment. With 10.2 percent of Florida’s workforce looking for jobs the state is burning through money to pay unemployment claims. As Whitney Ray tells us, the state will borrow money from the federal government and raise business taxes to keep money flowing to qualified job seekers.

Florida prints 65 million dollars in unemployment checks every week. There’s 460 million dollars left in a state fund to pay claims. The money will run out in August, and the state will have to ask Uncle Sam for help.

“Traditionally the unemployment compensation trust fund is funded through employer contributions. Any advances that we seek right now will come through the federal compensation trust fund,” said AWI Spokesman Robby Cunningham.

Even though the loan will come from the feds, employers will still have to cough up some extra cash. Right now business owners pay taxes on the first 7,000 dollars of each of their employees’ salaries. Starting in January the taxable amount will increase to 8,500 dollars.

Which means a business with 10 employees will see an average increase of about 200 bucks a year, although some will pay more. The percentage each business pays fluctuates between one and five percent. The Florida Chamber of Commerce supports the increase because it will keep money in the consumers’ hands.

“The good thing about the unemployment trust fund is, for every dollar paid out a $1.64 comes back to our state’s economy, so business owners are hoping to get a return on that investment,” said Chamber Spokesman Dan Krassner.

The tax increase is set to expire in 2015 or when the state’s unemployment compensation fund is replenished. The Florida Department of Revenue will print the changes to the unemployment tax base in a handbook for small businesses expected to be available later this summer.

Posted in State News, Taxes, Unemployment | 2 Comments »

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