Bill Text: PA HR223 | 2011-2012 | Regular Session | Introduced

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Bill Title: A Concurrent Resolution urging the Congress of the United States to reexamine the Federal Unemployment Tax Act as it relates to corporate officers.

Spectrum: Partisan Bill (Republican 8-0)

Status: (Passed) 2012-04-10 - Referred to FINANCE [HR223 Detail]

Download: Pennsylvania-2011-HR223-Introduced.html

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PRINTER'S NO. 1564
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE RESOLUTION
No. 223 Session of2011
INTRODUCED BY TRUITT, BOYD, CLYMER, CUTLER, MILLER, SCHRODER AND VULAKOVICH, APRIL 20, 2011
REFERRED TO COMMITTEE ON FINANCE, APRIL 20, 2011
A CONCURRENT RESOLUTION
Urging the Congress of the United States to reexamine the
Federal Unemployment Tax Act as it relates to corporate
officers.
WHEREAS, The Federal Unemployment Tax Act (FUTA) (Public Law
99-514, 26 U.S.C. Ch. 23) requires that every employer pay an
excise tax of 6.2% on the first $7,000 of total wages paid to
each employee; and
WHEREAS, FUTA includes corporate officers within the scope of
covered employment by defining these persons as an "employee" of
a corporation in section 3121(d)(1) of the Internal Revenue Code
of 1986 (Public Law 99-514, 26 U.S.C. § 3121(d)(1)); and
WHEREAS, Pennsylvania employers, including corporate
officers, can, to the extent provided by law, take a tax credit
against the FUTA tax of the unemployment contributions which
were paid into the Unemployment Compensation Fund; and
WHEREAS, FUTA establishes that employers may take a maximum
credit of 5.4% against the FUTA tax; and
WHEREAS, After the offset credit is applied, Pennsylvania
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employers that pay into the Unemployment Compensation Fund are
left to pay 0.8% FUTA tax on the first $7,000 in wages paid to
each employee; and
WHEREAS, The act of December 5, 1936 (2nd Sp.Sess., 1937
P.L.2897, No.1), known as the Unemployment Compensation Law,
requires that corporate officers pay unemployment compensation
taxes, although they generally are not eligible to collect
unemployment compensation benefits should they become
unemployed; and
WHEREAS, Pennsylvania corporate officers have expressed
frustration because they are required to pay into the
Unemployment Compensation Fund but are subsequently denied
unemployment benefits when they become unemployed; and
WHEREAS, The payment of unemployment compensation taxes is
especially burdensome for small, incorporated businesses; and
WHEREAS, Exempting Pennsylvania corporate officers from State
unemployment contribution liability would be futile because such
officers would then be required to pay the full 6.2% FUTA tax on
their wages instead of the net 0.8% rate normally paid with the
5.4% offset credit permitted for State unemployment taxes paid;
and
WHEREAS, Such an exemption would not provide any real tax
relief to corporate officers, but would merely result in the
Federal Government benefiting from additional tax revenue at the
expense of the Unemployment Compensation Fund; therefore be it
RESOLVED (the Senate concurring), That the General Assembly
of the Commonwealth of Pennsylvania urge the Congress of the
United States to reexamine the Federal Unemployment Tax Act
(Public Law 99-514, 26 U.S.C. Ch. 23) as it relates to corporate
officers and reevaluate the need for such a tax; and be it
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further
RESOLVED, That copies of this resolution be transmitted to
the presiding officers of each house of Congress and to each
member of Congress from Pennsylvania.
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