SUTA Dumping Prevention Act of 2004 was passed by the United States Congress and signed by the President in August 2004. This law requires each state to enact laws to prevent employers from inappropriately lowering their unemployment insurance contribution rates. The law not only bans SUTA dumping but also imposes heavy penalties on those who engage in or promote such abusive practices.

Some employers and financial advisors have found ways to manipulate state experience rating systems so that these employers pay lower state unemployment taxes than their unemployment experience would otherwise allow. This practice is called SUTA dumping. ("SUTA" refers to state unemployment tax act.) SUTA dumping frequently involves merger, acquisition or restructuring schemes, especially those involving shifting of workforce/payroll.

During the 2005 legislative session, the Missouri General Assembly passed House Bill Nos. 500 & 533, which prohibit SUTA Dumping in Missouri. This bill was signed by Governor Matt Blunt and is effective January 1, 2006.

For further details click here: SUTA Dumping Law & Regulation