Bill to Reduce Florida Unemployment Compensation Tax Expected to Pass Today

House Bill 7033, which would reduce the taxable wage base in Florida for the next two years, is on the Florida House of Representatives agenda for consideration today, March 2, 2010.  The bill, which is retroactive to June 29, 2009, is expected to pass the Legislature today and be signed immediately by Florida Governor Charlie Crist.

This bill would amend portions of Florida’s unemployment compensation (“UC”) laws and temporarily suspend changes made during the 2009 Florida Legislative Session to the calculation of an employer’s unemployment compensation tax.

Additionally, HB 7033 would make the following changes, among others:

• Reduction of the taxable wage base from $8,500 to $7,000 for two years. In 2012, the wage base would return to $8,500, and then sunset back to $7,000 in 2015, unless there are outstanding loan balances owed to the federal government by Florida.
• Suspension of the positive adjustment tax rate factor for the next two years. Regardless of the balance in the UC Trust Fund, no associated rate increase would be triggered under the provisions of HB 7033, since the positive adjustment factor will not be applied. The adjustment factor would be effective again beginning January 1, 2012, with a three-year recoupment period and then return to a four-year recoupment period under current law provisions, January 1, 2015.
• HB 7033 would allow employers to make their 2010 and 2011 UC tax payments in quarterly installments without interest or penalties as long as quarterly filing and payments are made according to the new schedule. The bill provides for payment of interest on federal advances through an employer assessment.

HB 7033 is expected to provide short-term relief to Florida businesses by reducing the UC tax in 2010 and 2011 to fall below current statutory requirements.

The bill is effective upon becoming law, retroactive to June 29, 2009.

To view a legislative summary of HB 7033, click here.

Should you have any questions or comments, please contact Colodny Fass.

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