The Idaho House has voted unanimously – 69-0 – in favor of HB 335, to cut unemployment insurance taxes for Idaho employers. The move sends the bill to the Senate side.
“You saw this bill a couple of times last year,” House Majority Leader Mike Moyle, R-Star, told the House. “This bill lowers the unemployment insurance taxes paid by our businesses throughout the state. It does so by adjusting the unemployment multiplier down. It’s a good bill.”
He said, “The reason we need to hurry with this bill is that those businesses start paying this tax the first quarter. … We need to let those businesses know what their rate has adjusted down to. … Hopefully you can support the bill.”
HB 335 would save Idaho employers $115 million over the next three years. It was proposed last year and widely supported, but it got killed in the cross-fire between the House and Senate over other tax cuts. In fact, it was Moyle who tried to tie the popular bill to a controversial income tax cut, in an unsuccessful effort to force the Senate to go along with the income tax cut; the Senate instead passed a bill to eliminate the sales tax on groceries, but the governor vetoed it.
Due to a robust and growing reserve fund, the bill cuts the divisor that determines the base rates for unemployment insurance tax from 1.5 to 1.3. There’s no cost to the state general fund.
The measure passed unanimously out of the House Revenue & Taxation Committee yesterday; all testimony the committee received was in favor of the bill, including comments from the Idaho Department of Labor, the Idaho Chamber Alliance and the Idaho Association of Commerce and Industry.
Gov. Butch Otter, in his State of the State message to lawmakers last week, urged them to make the employer tax cut “job one for 2018.”
This year’s version of the bill has an emergency clause, making it effective retroactively to Jan. 1, 2018.
Though passage of the bill would have no impact on the state general fund, the Department of Labor will incur $74,820 in additional costs because it will need to re-process and mail out notices. If the bill passes and becomes law by Feb. 28, it would avoid the need to issue credits for payments made during the first quarter of 2018 and allow Idaho employers sufficient time to reprogram their accounting and payroll systems.
The bill’s lead sponsors are listed as Moyle, the Department of Labor, and the governor’s office.