UI Tax Relief Bill Will Save Idaho Employers $115 Million Over Three Years
Employers to see tax savings during their first quarter payments
Governor C.L. “Butch” Otter signed a bill into law late last month that will reduce the unemployment insurance taxes paid by businesses by $115 million over three years.
House Bill 335 – passed unanimously by both the House and Senate – lowers rates for taxpaying businesses retroactive to January 1, 2018.
Under the changes proposed by this bill, the trust fund financed by employer tax contributions and used to pay benefits will continue to grow but at a slower rate, keeping the trust fund solvent and still providing the state with the financial capacity to pay unemployment insurance benefits for 15.6 months.
Almost all businesses that pay the unemployment insurance taxes will see a reduction of nearly 30 percent over three years, except for the most deficit-rated employers, whose rate is set at 5.4 percent and who receive more in unemployment benefits than the business pays into the unemployment insurance trust fund.
“Idaho businesses want consistency when paying unemployment insurance taxes,” Idaho Department of Labor Director Melinda Smyser said. “The strong, sustainable level of our trust fund will allow the state to provide unemployment benefits even during the worst of times, without borrowing money to do it.”
With a balance of $781 million as of December 2017, Idaho ranks among the top states in the nation for solvency – the ability to pay unemployment insurance benefits during economic downturns.