As the California Legislature returned to Sacramento last week, Assembly Speaker John A. Perez (D-Los Angeles) was busy addressing the Governor's budget plan, raising the issue of revising the Enterprise Zone program and commenting on the challenging issues for the year ahead.

TALX is actively monitoring legislation and will continue to do our best to keep you updated on the status of the California Enterprise Zone Program.

The following are tell-tale signs that 2012 promises to be an active, interesting and promising year!

Pérez made the following statement on Thursday regarding the Governor’s budget plan:

"The Governor's budget plan reflects the fact that even though California's economic recovery is gaining strength, we still face a year of difficult choices. His plan underscores the need for new revenues to avoid cuts that will be a major drag on the recovery, and I am looking forward to working with the Governor and my colleagues to produce an on-time budget that reflects California's values by our June 15th deadline."

Pérez addressed the Enterprise Zone program in an interview with John Myers:

A second look will also no doubt be taken at the issue of local economic development in the wake of the California Supreme Court ruling that abolishes more than 400 local redevelopment agencies next month. Speaker Perez dismissed any notion that actual RDAs will be recreated by the Legislature; instead, he emphasized the need for ways to promote job creation and economic stimulus that doesn't favor one region over another. And he suggested that the scrapping of RDAs could reignite his the effort of many Democrats to revise the state's enterprise zone program.

Maureen Schneider

Here is the latest addition of our Unemployment Flash Report.  Please send an e-mail to taxalerts@talx.com with any comments or suggestions.

Employer Tax Services

Rhode Island issued a flyer regarding unemployment and disability taxable wage bases and tax rates.  See the following link for a copy of the flyer.

Employer Tax Services

Pennsylvania recently sent a letter to employers regarding the reduction in FUTA credit on the 2011 Federal Form 940.  The letter also mentions the fact that the 2012 rate notices normally mailed on December 31 will be delayed.  Our contacts have told us that they do not have a projected mailing date at this time.  See  the link below for a copy of the letter.

Employer Tax Services

Michigan recently sent a letter to employers regarding the recent law changes and their effect on the 2012 rate determinations.  The mailing of the rates will be delayed until the end of January 2012.  See the link below for a copy of the letter.

Employer Tax Services

Both the House and Senate have passed a two month extension to the payroll tax cut. While it was hoped that WOTC would be part of this conversation, ultimately the legislature chose to focus only on the tax cut and not any of the tax extenders.

This two month extension does, however, force the legislature to renegotiate the payroll tax cut early next year. It is a possibility that at that time the payroll tax cut talks would also include WOTC and the extenders. For now, the core WOTC program will enter hiatus on Jan 1, 2012 while the specific veteran provisions in the Vow to Hire Heroes Act of 2011 will continue through 2012.

Ezrie Yellin

Providing all applicable information at the beginning of the unemployment insurance process can streamline the steps involved in presenting a strong case to the state agency and expedite the adjudication process.

More states are enacting or enforcing current legislation to penalize companies for not submitting all facts pertinent to a former employees’ separation from employment by the claim response deadline.  If employment separation details and applicable personnel documents are not provided by the claim response deadline, the consequences can be harmful to the employer.  Several states will charge the employer a partial or whole percentage of any benefits already issued to the other party despite the employer’s later submission of details that resulted in a reversal of the earlier ruling. Other states will issue a penalty statement with a specific dollar amount cited that is applied to all employers when the facts are not provided by the claim deadline, i.e. $15.00 for a late response or no response.

The consistent implementation of the guidelines below can simplify the process of gathering the employment separation information needed to submit to your Third Party Agent. These recommendations will also make the fact-finding process less time consuming for managers and human resources personnel responsible for submitting the information:

Check the request notice prior to sending the completed form to your unemployment insurance consultant to ensure you are providing all of the requested information outlined on the notice.

Let your consultant know if you have questions relative to the separation reason or unemployment adjudication process.

Aim for providing applicable supporting documents to substantiate the separation reason.

 Initiate a dialogue with your consultant, without hesitation, whenever you need their expert opinion. Remember, they are your partner in the process.

Make your case by presenting all pertinent facts.

Strategize with your consultant, when applicable, to determine the best approach to present a strong case.

Sharon L. Pate, Assistant Claims Manager, TALX Corporation

Indiana issued a memorandum regarding 2012 unemployment tax rates and other news.  Tax rate notices will be issued sometime in January 2012.  See the link below for a copy of the memorandum.

Employer Tax Services

The House of Representatives has adjourned its legislative activities pending a possible call back to Washington. At the same time, The Senate has reached an agreement on a temporary two month payroll tax cut extension. WOTC is part of the tax extenders, and these are now less likely to be taken up with any urgency before the end of the year due to the extension of the payroll tax cut, save one potential opportunity wherein John Boehner, Speaker of the House, has asked the House and Senate to attend a conference concerning the details of the payroll tax bill.

It is a possibility then that WOTC and the tax extenders may be included as part of the conference agenda and any agreement that comes out of it. Mr. Boehner is advocating for a full year extension of the payroll tax cut, and as such, rejected the Senate’s two month plan saying: “Americans are tired of Washington’s short-term fixes and gimmicks and fixes. We oppose the Senate bill because doing a two-month extension instead of a full-year extension causes uncertainty for job creators.”

Separately, Max Baucus, chairman of the Senate finance committee has pledged, regardless of the outcome of the payroll tax negotiations, to continue working on tax cuts “for families, individuals and small businesses.” Says Mr. Baucus:

“We came together today to pass a package that provides much-needed relief for middle-class families and a boost for our economy by extending the payroll tax holiday and continuing assistance for the unemployed while ensuring that our seniors have access to their doctors. We’ve been fighting to get these done and we’re going to keep fighting to extend other expiring tax cuts for families and small businesses to put more money back in their pockets and provide certainty for our economy when Congress reconvenes. As we work together on comprehensive tax reform for the long-term, reaching a permanent agreement on expiring tax cuts right away must be our top priority.”

Colorado passed Senate Bill 10-162, along with several other bills resulting in significant changes to Enterprise Zone Tax Credits and the process by which Enterprise Zone tax forms are certified, including the pre-certification of credits, electronic certification process, electronic notification and electronic filing.  Senate Bill 10-162 establishes a requirement that businesses receive pre-certification each year prior to earning Enterprise Zone business tax credits.  This requirement will take effect for credits that will be earned on or after January 1, 2012.  Pre-certification is needed for the investment tax credit, commercial vehicle investment tax credit, new business facility jobs credits, research and development credit, qualified job training credit, and the rehabilitation of vacant commercial buildings credit.

If your business anticipates taking advantage of the Enterprise Zone business tax credits for 2012, a pre-certification will be needed for each Enterprise Zone location prior to earning the credit.  Business activities cannot take place prior to receiving pre-certification to be eligible for an Enterprise Zone tax credit earned.  The information provided is intended to update your company on new program requirements for the Colorado Enterprise Zone regarding per-certification to insure no Enterprise Zone tax benefits are lost.  TALX can assist your business in submitting the appropriate forms to receive pre-certification and receive the credits earned.

Maureen Schneider