Inslee Announces COVID Tax Relief for Businesses

On Monday Gov. Jay Inslee signed legislation providing tax relief for businesses impacted by the COVID-19 pandemic. SB 5061 will also increase minimum unemployment benefits for workers and provide significant tax relief for businesses over the next five years, to support recovery from the economic impacts of COVID shutdowns. The legislation passed with strong bipartisan support in both chambers.

SB 5061 relieves employers of individual benefit charges for claims that occurred between March 22 and May 30, 2020, the period of the governor’s “Stay Home, Stay Healthy” order, and caps certain tax rates through 2025. Together, these actions prevent a $1.7 billion spike in unemployment taxes over the next five years, including just over $920 million in rate increases this year. At a time when revenue is down and employers are facing increased costs of business, this bill offers much needed relief.

The legislation also addresses the hardship being faced by workers, putting more money into the pockets of those experiencing unemployment by increasing the minimum benefit starting July 1.

Additionally, SB 5061 makes policy updates to ensure that Washington’s unemployment insurance system is more nimble and responsive during public health emergencies. This includes eligibility for individuals at high risk for severe illness and their family members. It also ensures that federal money will not be left on the table when federal support is available for certain benefit programs and makes improvements to the state’s Voluntary Contributions Program which allows employers to buy-down rate increases even further.

Businesses and individuals won’t have to go through any additional processes in order to receive the deductions or increased benefits.

“This legislation is a first step in the right direction and will significantly reduce the increase in unemployment insurance taxes facing Washington employers because of the pandemic,” said Kris Johnson, President of the Association of Washington Business. “We know more needs to be done, including a commitment to funding, and look forward to continued collaboration with the governor and legislature to restore lost jobs and begin rebuilding the economy.”