Ranzenhofer urges Congress to waive business tax
Calls for repeal of $95 million unemployment surcharge
State Senator Michael H. Ranzenhofer has written to Western New York’s Congressional representatives, requesting the passage of legislation to repeal a federal tax of $95 million imposed on New York businesses to cover unemployment costs.
“Since Congress has failed to act on legislation that would extend this much needed relief, now businesses in New York have had to fork over another $95 million in tax payments to their government,” said Senator Ranzenhofer. “That is why I am urging our representatives in the House and Senate to pass this legislation immediately so that these dollars can have a better purpose – for reinvestment in businesses and the creation of jobs.”
Businesses were billed in mid-July for an “Interest Assessment Surcharge.” The $95 million tax amounts to a bill of approximately $21.50 for each employee. The payment was due August 15.
The recent national recession has led to record numbers of workers receiving unemployment benefits. As a result, since 2009, New York has borrowed over $3 billion from the federal unemployment insurance trust fund. When the fund runs a deficit, the State must pay interest on money borrowed from the federal government. The interest payments have been waived for the last two years pursuant to the American Recovery and Reinvestment Act. Congress has failed to act on an extension since December 31, 2010.
U.S. Senator Charles Schumer has announced that he will introduce legislation that would extend the waiver of interest retroactively to the beginning of 2011.
Senator Ranzenhofer’s letter states: “The federal government, recognizing that businesses could not afford to pay interest on unemployment loans until the economy recovered, passed legislation that waived payment of interest and principal on loans made for unemployment benefits during 2009 and 2010. Unfortunately, this legislation was not extended.”
“Western New York businesses continue to struggle to survive, and the payment that they are now being required to pay as a result of reinstituted interest by the federal government is yet another impediment to their survival, and the survival of the jobs they provide. I support this legislation to extend the waiver of interest, and urge you to do whatever you can to make sure that legislation is passed that will continue to extend interest-free loans to states for unemployment through 2012.”
Senator Ranzenhofer wrote the letter to Congressional representatives Brian Higgins, Kathleen Hochul and Louise Slaughter and United States Senators for New York, Charles Schumer and Kirsten Gillibrand.