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1
HOUSE RESOLUTION

 
2    WHEREAS, The unemployment insurance tax is assessed
3against employers in order to cover the costs of any benefits
4drawn out by the former employees of each employer; and
 
5    WHEREAS, The unemployment insurance tax rate varies
6according to each employer; and
 
7    WHEREAS, The unemployment insurance tax is assessed
8against the same base wage of the first $11,000 earned by each
9employee; and
 
10    WHEREAS, For the vast majority of employers, the entire
11unemployment insurance tax is assessed and paid in the first
12quarter of the calendar year, as most employees earn more than
13$11,000 in the first quarter of the year; and
 
14    WHEREAS, For example, if a typical unemployment tax is
15approximately $800 per employee, a 10-employee firm must come
16up with $8,000 in the first quarter of the year, instead of
17$2,000 every quarter, to pay the unemployment tax; and
 
18    WHEREAS, This situation presents a cash crunch for small
19and mid-market employers who must finance the entire year's
20unemployment tax in the first quarter of the calendar year; and
 

 

 

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1    WHEREAS, Larger employers are more likely to have the
2capital to finance the unemployment insurance tax over the
3entire year, while small and mid-market businesses without the
4capital must pay all the tax as it comes due; this situation
5hits small and mid-market businesses with a cash flow impact
6proportionately harder than larger employers; and
 
7    WHEREAS, Small and mid-market businesses would prefer to
8spread out the payments for the unemployment insurance tax over
9the entire year to avoid the cash crunch in the first quarter,
10while still paying the same total amount; therefore, be it
 
11    RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE
12NINETY-SEVENTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that
13we state our belief that eliminating the first quarter cash
14crunch of small and mid-market businesses paying unemployment
15taxes by allowing for quarterly payments based upon the accrued
16obligation is a pro-business public policy move; and be it
17further
 
18    RESOLVED, That we encourage all interested stakeholders in
19the State's unemployment insurance system to consider this
20shift before the next General Assembly in order to reach a
21consensus on the best revenue-neutral method of eliminating the
22current policy of imposing a first-quarter cash crunch on

 

 

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1Illinois businesses.