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FOR MORE INFORMATION CONTACT: Tammy Cavender (573)
751-7500
FOR IMMEDIATE RELEASE: June 20, 2006
Governor Blunt Takes Action to Preserve Tax Credits for Employers
Jefferson City, MO – Governor Matt Blunt today announced a request was sent to the US Department of Labor for avoidance to reduce Federal Unemployment Tax Act (FUTA) credits given to Missouri employers. If the request is granted, the avoidance will save employers across the state an estimated $102.4 million.
Governor Blunt made the request to help manage a federal debt that was incurred under the previous administration. The Missouri Division of Employment Security began borrowing money in March 2003 to pay for unemployment insurance benefits. Over a two year period, the state incurred a federal debt of $288 million. Due to the length of time the state has borrowed money from the federal government without repayment, Missouri is in jeopardy of losing FUTA credits for its employers. Losing the FUTA credits could cost employers across the state an estimated $102.4 million or $42 per employee.
“I’m committed to taking the necessary steps to preserve tax credits for employers,” said Governor Blunt. “Missouri’s economy has made tremendous strides over the last year and reducing tax credits received by employers may hinder growth opportunities for businesses and negatively impact the pro-growth, pro- family policies enacted under my administration.”
Missouri must meet certain criteria before the federal government will approve its request. One of the key criteria to be granted avoidance requires Missouri to pay $102.4 million, which is the estimated amount of FUTA tax credits employers would have had to pay if the avoidance is not granted. The Department’s projections indicate that the Unemployment Trust Fund will have sufficient revenues to meet this important requirement.
The US Department of Labor has until early November to decide whether or not to accept Missouri’s application. A similar request was granted last year by Governor Blunt, which saved Missouri businesses $50.3 million in taxes.
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Information and Planning · 421 East Dunklin
· P.O. Box 504 · Jefferson City, MO
65102-0504
573-751-7500 · 573-751-6552 (Fax)
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