Company Opposes Paying Unemployment Taxes Monthly.
Company Opposes Paying Unemployment Taxes Monthly.
- AuthorsSelf, Nancy M.
- Institutional AuthorsMicron Technology, Inc.
- Code Sections
- Subject Area/Tax Topics
- Index TermsFUTA tax, payment
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 96-18047 (1 page)
- Tax Analysts Electronic Citation96 TNT 122-24
Nancy M. Self of Micron Technology, Inc., Boise, Idaho, has expressed opposition to a plan to change unemployment tax payments from quarterly to monthly. Self says the proposal will increase her company's administrative costs significantly and cause the company to lose the interest on the funds.
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June 6, 1996
The Honorable Robert E. Rubin
Secretary of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, DC 20220
Dear Secretary Rubin:
[1] I am writing on behalf of Micron Technology, Inc., to express concern regarding proposed changes in unemployment tax payment rules which are part of the Administration's budget proposal. Specifically, we are concerned that a proposal to require employers to pay federal and state unemployment taxes on a monthly basis, as opposed to the current quarterly payment system, will add a significant administrative cost to our company.
[2] The budget proposal as drafted would require employers after December 31, 2001, to pay federal and state unemployment taxes on a monthly basis in a given year if the employer's FUTA tax liability in the prior year was $1,100 or more. As the largest private employer in the state of Idaho with over 9,500 employees, Micron will fall under this requirement. Our federal and state employment taxes were a significant dollar amount in 1995 totaling approximately $2.6 million. We anticipate that the requirement to pay on a monthly basis will cost us substantially from an administrative perspective and also in lost interest due to the accelerated payments.
[3] The proposal to accelerate unemployment tax payments seems part of a larger trend of accelerated tax payments which places a greater burden on employers. It follows previous changes in which employers were required to accelerate "941" tax payments as early as next day deposits for amounts over $100,000. In moving from a quarterly to a monthly payment basis for unemployment taxes, additional resources will be needed to compute the tax owed and prepare up to 12 deposits per year. There is also the problem of the effect of the proposed change on state unemployment insurance systems. Because of the difficulties involved for some states in transferring to a monthly payment system and because the Administration does not require them to convert, multi-state employers such as Micron are likely to be faced with a system which requires them to submit some state taxes monthly and others quarterly. This will further add to the administrative costs associated with the proposed change to a monthly payment system.
[4] For these reasons, we would ask you to reconsider the Administration's stance on changing the reporting requirements from quarterly to monthly. The proposal poses a significant additional cost to business and unfairly penalizes those businesses who have a good record of making deposits on time.
[5] Thank you for your consideration. Please don't hesitate to contact me if I can provide additional information.
Sincerely,
Nancy M. Self
Vice President
Administration
MICRON
Boise, Idaho
cc: Idaho and Utah Congressional delegations
Matthew Gorman, Office of Business Liaison
- AuthorsSelf, Nancy M.
- Institutional AuthorsMicron Technology, Inc.
- Code Sections
- Subject Area/Tax Topics
- Index TermsFUTA tax, payment
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 96-18047 (1 page)
- Tax Analysts Electronic Citation96 TNT 122-24