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Lawmakers quickly pass a bill to prevent businesses from receiving a surge in taxes

The state Department of Labor and Industrial relations building.
The state Department of Labor and Industrial relations building.(Hawaii News Now/file)
Updated: Feb. 24, 2021 at 5:36 PM HST
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HONOLULU, Hawaii (HawaiiNewsNow) - Lawmakers rushed to pass a new bill on Wednesday that would protect businesses from receiving a tax hike next month.

Amid record setting unemployment, many Hawaii companies and non-profit agencies would face an increase in unemployment tax due to a surge in claims.

To prevent businesses from getting hit with this automatic tax, a bill is moving through legislation to temporarily reduce employer’s unemployment contribution rates to the state, meaning that businesses would not have to reimburse the unemployment system, for now.

Lawmakers said that more than a billion dollars in claims are needed.

Ryan Kusumoto, president and CEO of Parents and Children Together, said that non-profits have already been struggling as they have to pay unemployment directly for those they lay off.

Unlike other businesses, tax for non-profits operate differently and organizations have already seen significant tax increases.

“On average, we have collectively seen increases of about 260% and some organizations have seen increases up to 1600%,” said Kusumoto.

Sherry Menor-McNamara of the Chamber of Commerce said, “We know its going to be a long path toward economic recovery, but this is definitely one important issue that is a top priority for us.”

Lawmakers said they also hope to find money to cover the unemployment shortfall through budgeting, reorganization and new federal aid.

Discussion of the new bill comes as scores of unemployed workers marched to state Capitol on Wednesday, demanding improvements to the state’s outdated unemployment system and for the state to reopen the unemployment office.

Gov. David Ige is expected to sign the bill.

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