Perhaps the greatest relief for businesses during the 2012 Kentucky General Assembly was the passage of legislation (HB 495) that addresses the interest on the debt the state owes the federal government for unemployment insurance (UI). Without a mechanism to repay this interest, Kentucky employers would have faced a disastrous $420-per-employee tax penalty. In a cooperative effort, working closely with the Chamber and other business groups, legislators addressed this problem in a bipartisan way that provides for both the interest payment and opportunities for future tax relief on businesses.
HB 495 prevents a $609 million tax increase on Kentucky employers by creating a permanent mechanism to pay back the interest the state owes to the federal government for UI. The bill requires the governor to seek a cap on federal taxes and provides additional tax relief in future years.
Listen here for more on the UI solution and its impact on Kentucky businesses.