Senate Bill 130

143rd General Assembly (2005 - 2006)

Bill Progress

Signed 7/12/05
The General Assembly has ended, the current status is the final status.

Bill Details

5/12/05
Rep. Oberle
Sen. Venables
Rep. Viola
AN ACT TO AMEND CHAPTER 33, TITLE 19 OF THE DELAWARE CODE RELATING TO UNEMPLOYMENT COMPENSATION.
This legislation is required to bring Delaware’s Unemployment Insurance Code into compliance and conformity with the provisions of federal law---Public Law No. 108-295, the “SUTA Prevention Act of 2004”. The provisions of Public Law No. 108-295 and this legislation are intended to prohibit the following two methods of SUTA dumping (deliberate avoidance of the payment of the proper unemployment insurance tax): An employer escapes the proper unemployment insurance tax rate based on actual employer experience by setting up a shell company and then transferring some or all of its workforce (and the accompanying payroll) to the shell company after the shell company has earned a low unemployment insurance tax rate. The transferred payroll is then taxed at the shell company’s lower tax rate. An entity commencing a business purchases an existing small business with a low unemployment insurance tax rate. Instead of being assigned the new employer tax rate, the entity receives the small business’s lower tax rate. Typically, the new business ceases the business activity of the purchased business and commences a different type of business activity. The effective date of this legislation is January 1, 2006.
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