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S.C. Officials Announce Freeze to 2021 Unemployment Tax Rate
South Carolina has taken another step to help businesses get back on their feet.
On November 12, Governor Henry McMaster announced 86% of the state’s employers will avoid an unemployment insurance tax increase in 2021.
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The only businesses that will see an increase in their tax rate are those that changed tax classes before the pandemic or had layoffs that were not COVID-19 related, which is only 13% of the state’s businesses.
Since the legislature dedicated $920 million in CARES Act money to replenish the unemployment insurance trust fund, business owners will have more money to rebuild and rehire. This announcement brings some hope to the state’s struggling hospitality industry.
“We’ve taken it on the chin,” said Bobby Williams, owner of Lizard’s Thicket and chair of the South Carolina Restaurant and Lodging Association. “It’s been a horrible year to be in a restaurant, hotel, or especially catering. This is one thing they could do that affected everybody in business. So, it was a welcome surprise.”
Without this rate freeze at the 2020 level, businesses would have had to pay double.
“That was a shock that we didn’t think they could withstand,” explained DEW Executive Director Dan Ellzey.
Employers, like Williams, would have had to increase prices or cut staff to be able to make up the approximately $172.4 million needed to rebuild the trust fund in 2021.
“Employees that don’t even know across South Carolina that if the General Assembly and the executive branch had not come together to do this, they probably wouldn’t have had a job right now. So, we want to thank you,” said Ted Pitts, president and CEO of the South Carolina Chamber of Commerce.
Since the pandemic, 75% of jobs lost in South Carolina have been regained, compared to the national average of only 56%.
“We took a very careful, methodical, and determined approach, and it has paid off for the people in South Carolina,” said McMaster. “Now, we are in a position to accelerate even more and to grow out of this pandemic and to get our business booming.”
While this tax freeze is helpful, Williams says our state’s businesses also need additional federal help to stay afloat.
“We need another round of PPP,” he explained. “Everybody blew through that money so fast, and it’s held up between the political parties in Washington right now, but honestly, between now and the first of the year, a lot of restaurants and hotels are going to close.”
Even with coronavirus case numbers rising across the country and in South Carolina, McMaster says he’s not considering closing businesses again to stop the spread.
He’s encouraging everyone to get tested regularly, to social distance, and to wear your masks.
The South Carolina General Assembly approved up to $920 million of CARES Act funding to:
Freeze 2021 tax rates at their 2020 levels and Replenish the Unemployment Insurance Trust Fund balance.
The agency maintained diligent rebuild efforts for the UI Trust Fund after the Great Recession to ensure the state could withstand another economic crisis.
