Gov. McMaster announces cuts to unemployment tax rate
COLUMBIA, SC (WACH) – Gov. Henry McMaster was joined by S.C. Department of Employment and Workforce Executive Director Cheryl Stanton Tuesday morning to announce that the department has cut the Unemployment Insurance tax rate on South Carolina businesses for a fifth consecutive year.
"Any time we are able to cut taxes for South Carolina businesses, it gives them the flexibility to grow and create more opportunities for their employees," said McMaster. "We continue to see record lows in unemployment and more people working in South Carolina than ever before, and if we’re able to continue to cut taxes and invest in education and workforce development, we know our state’s brightest days are ahead of us."
The 2018 tax rate represents an average reduction of 10.2-percent over last year’s rate, and a 36.4-percent drop over the last five years. These cuts have been made while rebuilding the trust fund to a level that will withstand an economic downturn. The amount to businesses in tax rate classes 2-19 to save an average of $20 per employee.
"Businesses are investing in South Carolina by expanding here and, in doing so, have put a record 2.23 million people to work, the most than any time in our state’s history. This strong economy is allowing us to invest back into these businesses by reducing their tax burden while rebuilding the Trust Fund to a level that will sustain a recession," said Stanton. "Our gratitude goes out to the business community and workforce development training partners who have worked hard to create jobs and provide the skilled workers to fill them."
Rate reductions are a direct result of the state’s robust economy, with businesses employing more than 2.23 million South Carolinians and an unemployment rate that is at a 16-year low.
During the Great Recession, South Carolina needed to borrow nearly $1 billion from the federal government in order to provide unemployment benefits. The agency, however, was able to pay off the loan early saving businesses $12 million. After the loan was paid off in 2015, the Legislature passed a regulation that requires DEW to rebuild the Trust Fund within five years to a level that will fund the potential benefit needs without borrowing from the federal government. The agency is in the third year of that effort.
This is also the fifth consecutive year that businesses will receive their individual tax rate notices during the first week of November, six months before the first tax payment is due. Contribution and wage reports are due by April 30, 2018, and these tax rates apply to the first $14,000 earned by each employee.