Employers-Tax Loophole

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The Alabama Senate left more than the state's General Fund budget on the table when it adjourned on the night of May 16.

The Senate failed to act on dozens of bills, including one routine-looking measure to eliminate a loophole in the way employers pay the unemployment compensation tax. Failure to pass that bill could end up costing many employers in Alabama about 10 times what they are now paying per employee to make sure workers receive unemployment compensation.

Phyllis Kennedy, director of the Alabama Department of Industrial Relations, says employers currently pay about $56 a year per employee, but if the bill does not pass by January first, the businesses would lose a federal tax credit and pay more than $400 annually per worker.

The Governor's Office says the bill may be a high priority in the special session.