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Businesses Feel Pain of Higher Unemployment Tax

January 5th, 2010 by Mike Vasilinda

Businesses across Florida are bracing for five hundred and even one thousand percent increases in the cost of their unemployment compensation taxes. Notices of the hike went out in December, and as Mike Vasilinda tells us, a small business association says the jump in taxes could hurt an economic recovery.

Florida ran out of money to pay unemployment claims in August. Since then it has been borrowing from the federal government and owes about a billion dollars. Forms like this one went out in late December informing businesses they would have to pay more for unemployment compensation. The minimum rate for employees is going from just over 8 dollars to just over a hundred dollars per employees. Randy Martin calculates his bill will go up from 41 hundred last year, to over 21 thousand this year.

I realize there is a tax because the state has gone bust,” Martin said. “However, my tax has gone up 545 percent. I think that is a bit exorbitant.

In 2009, unemployment taxes were paid on the first 7 thousand dollars of wages. In 2010, it will be on the first 85 hundred.

The tax is due March 1st, but it isnt late until April 30th. Small business lobbyists are pushing lawmakers to delay the increases this year.

We need that money so that we can go back to some of those employees we had to lay off last year and say, please come back in 2010,” Bill Herrle with the National Federation of Independent Businesses said. “Its a real jobs killer.

Martin says he will delay purchasing new vehicles and other items to avoid layoffs, but he says the tax payment is going to hurt.

its affecting our profit margin by 20 percent,” Martin said.

Meanwhile, Florida continues to borrow about 300 million dollars a month to pay unemployment claims.

Floridas unemployment rate continues to climb and isnt expected to level out until April.

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