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1995 SESSION

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HB 2054 Unemployment compensation; tax rates for new employers.

Introduced by: Thomas M. Jackson, Jr. | all patrons    ...    notes | add to my profiles

SUMMARY:

Unemployment compensation; tax rates for new employers. Modifies provisions governing the tax rates applicable to employers new to the Virginia unemployment compensation program. Under current law, such employers, whether starting a new business in Virginia or moving an existing business to Virginia from another state, must pay a flat 2.5 percent rate for a period of three years. This tax is paid on the first $8,000 of payroll for each employee. After approximately one year, such employers may, on the basis of experience rating, pay more than 2.5 percent, but not less than that rate until the three-year period is completed.

This bill retains the 2.5 percent new-employer rate, but eliminates the rate's three-year duration, thereby permitting new employers to be experience-rated at the earliest possible time under current law. Under current law, the experience rate, or “computed rate” may be determined after the employee has had at least one employee covered under the act for 30 days and, thereafter, has been subject to the act for a full 12-month period commencing not later than July 1 of the year preceding the year for which a rate is to be computed. This rate will then be effective for the next tax year beginning January 1.

The bill's provisions will become effective on January 1, 1996, and will expire on January 1, 1998.


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