Riley said businesses that had to lay off a lot of workers will be taxed above the average rate because of the way the state’s formula calculates business contributions. Nicole Riley, the Virginia director for the National Federation of Independent News, said that amounts to an average annual contribution of $360 per employee in 2022, up from $90 in 2021 and $70 in 2020. Layne said the General Assembly should use at least a billion dollars from the American Rescue Plan–the latest coronavirus relief package–to shore up the unemployment trust fund and avoid a “crippling” tax increase.
Lesser-known Virginia mask ban returns July 1, Governor Northam expects residents won’t face charges “Without any action, it will be a very significant tax increase and unfortunately a burden on small businesses. At a time when we are trying to help them with grants, to me, it doesn’t make a lot of sense to turn around and increase their taxes,” Layne said in a phone interview on Thursday.
If the General Assembly doesn’t act, businesses statewide are facing a fourfold increase in payroll taxes starting in 2022, according to projections cited in a recent Virginia Employment Commission presentation. Virginia’s Secretary of Finance Aubrey Layne said the state borrowed money from the federal government as a temporary fix. Now, to get back up to pre-pandemic levels, he said there are two options: higher taxes or federal relief funds.
A spokesperson for House Appropriations Committee Chair Del. Luke Torian (D-Prince William) said there will likely be an update sometime next week. Virginia businesses facing big payroll tax hike without General Assembly action The governor is expected to make formal spending recommendations before the General Assembly reconvenes later this summer but state lawmakers will have the final say on where federal relief funds go.
However, that doesn’t mean a smaller tax hike is off the table, according to Layne. “I’m pretty comfortable they are going to do this but it’s just a matter of magnitude,” Layne said.
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- Virginia Companies Face Big Payroll Tax Increase Without General Assembly Action | WJHL
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