What is SUTA Dumping?

State Unemployment Tax Act (SUTA) dumping is a way that businesses cheat the system and lower their state unemployment insurance taxes. This is also known as a form of tax evasion.

SUTA dumping is done by using the state’s rating system in an unfair way. North Carolina has a law against SUTA dumping (N.C. G.S. § 96-11.7(c)) to protect the funds that help unemployed workers. 

Common Ways Businesses Practice SUTA Dumping:

• Moving employees from a business with a higher tax rate to one with a lower tax rate.
• Not reporting when a business is sold or transferred.
• Not reporting when transferring employees between multiple accounts owned by the same individual or business.
• Using fake or pretend companies to report their payroll and protect the real business from a higher state unemployment insurance tax rate. 

This law helps keep the unemployment system fair and ensures that funds are available for workers who need them.

Report SUTA Dumping or Fraud