New law boosts Florida's unemployment fund
Florida’s unemployment trust fund has gained back about a half-billion dollars since a new law began requiring out-of-state online retailers in July to collect sales taxes on purchases made by Floridians.
The trust fund, which was depleted because of massive job losses early in the COVID-19 pandemic, now tops $1.3 billion, Adrienne Johnston, chief economist for the Department of Economic Opportunity, told the Senate Commerce and Tourism Committee on Monday.
The fund, which had a little more than $4 billion before the pandemic in January 2020, was at around $800 million in July 2021. Johnston said $526 million was transferred into the trust fund in August and early September.
Also, the Department of Revenue has credited $447 million to businesses that had paid into the fund since May.
The new law requiring out-of-state online retailers to collect sales taxes came after House and Senate leaders agreed to first use the additional money to replenish the unemployment trust fund.
Before the pandemic, businesses paid $7 per employee in unemployment taxes. Because of the surge in unemployment claims, the unemployment tax rate went to $49 this year and was projected to jump to $87.
The state’s unemployment rate was at 5 percent in August, with September numbers scheduled to be released Friday.
The new law is expected to generate $1 billion a year for the state, with the additional revenue projected to get the unemployment trust fund to about $3.25 billion in October 2023.
After the fund is replenished, the revenue will be used to make a major cut in the commercial-rent tax, long a target of business lobbying groups.
Senate President Wilton Simpson, R-Trilby, and House Speaker Chris Sprowls, R-Palm Harbor, agreed to reduce the commercial rent tax from 5.5 percent to 2 percent.