SUTA dumping
Encyclopedia
SUTA Dumping is a name commonly used to describe a practice used by some companies doing business in the United States
to circumvent paying unemployment insurance taxes, as mandated by the Unemployment Tax Act of 1939.
In all 50 states, each employer is given a variable "experience" or "unemployment insurance" rate, depending on various factors, including worker retention. Some businesses retain the same employees for years, and have a low rate, while other industries (such as construction) tend to have high turnover and a corresponding higher rate. New businesses are given a 'new employer rate', which varies per state - California
's, for example, is 3.4% - and stay on that rate for a few years until they are considered "experience rated".
To avoid higher tax rates, some companies get multiple account numbers with a state unemployment insurance agency, and shuffle employees around to the account number with the lowest unemployment insurance rate each year. Another common scheme is to buy a business with a lower unemployment insurance rate and shuffle employees to that other business to pay the lower tax rate.
President George W. Bush
signed the SUTA Dumping Prevention Act on August 9, 2004, to curb this practice.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
to circumvent paying unemployment insurance taxes, as mandated by the Unemployment Tax Act of 1939.
In all 50 states, each employer is given a variable "experience" or "unemployment insurance" rate, depending on various factors, including worker retention. Some businesses retain the same employees for years, and have a low rate, while other industries (such as construction) tend to have high turnover and a corresponding higher rate. New businesses are given a 'new employer rate', which varies per state - California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
's, for example, is 3.4% - and stay on that rate for a few years until they are considered "experience rated".
To avoid higher tax rates, some companies get multiple account numbers with a state unemployment insurance agency, and shuffle employees around to the account number with the lowest unemployment insurance rate each year. Another common scheme is to buy a business with a lower unemployment insurance rate and shuffle employees to that other business to pay the lower tax rate.
President George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
signed the SUTA Dumping Prevention Act on August 9, 2004, to curb this practice.