HR0077 99TH GENERAL ASSEMBLY

HR0077 LRB099 06464 GRL 26534 r

HOUSE RESOLUTION

WHEREAS, The unemployment insurance tax is assessed against employers in order to cover the costs of any benefits drawn out by the former employees of each employer; and

WHEREAS, The unemployment insurance tax rate varies according to each employer; and

WHEREAS, The unemployment insurance tax is assessed against the same base wage of the first $11,000 earned by each employee; and

WHEREAS, For the vast majority of employers, the entire unemployment insurance tax is assessed and paid in the first quarter of the calendar year, as most employees earn more than $11,000 in the first quarter of the year; and

WHEREAS, For example, if a typical unemployment tax is approximately $800 per employee, a 10-employee firm must come up with $8,000 in the first quarter of the year, instead of $2,000 every quarter, to pay the unemployment tax; and

WHEREAS, This situation presents a cash crunch for small and mid-market employers who must finance the entire year's unemployment tax in the first quarter of the calendar year; and

WHEREAS, Larger employers are more likely to have the capital to finance the unemployment insurance tax over the entire year, while small and mid-market businesses without the capital must pay all the tax as it comes due; this situation hits small and mid-market businesses with a cash flow impact proportionately harder than larger employers; and

WHEREAS, Small and mid-market businesses would prefer to spread out the payments for the unemployment insurance tax over the entire year to avoid the cash crunch in the first quarter, while still paying the same total amount; therefore, be it

RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE NINETY-NINTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that we state our belief that eliminating the first quarter cash crunch of small and mid-market businesses paying unemployment taxes by allowing for quarterly payments based upon the accrued obligation is a pro-business public policy move; and be it further

RESOLVED, That we call upon the Illinois Department of Employment Security to implement an optional quarterly payment system for taxpayers pursuant to all existing statutory authority as quickly as possible; and be it further

RESOLVED, That a suitable copy of this resolution be delivered to the Director of Employment Security.