State Unemployment Tax Act dumping is a practice used to circumvent paying unemployment insurance taxes involving manipulation of the state experience rating systems to achieve a lower tax rate. North Carolina's SUTA dumping law is under N.C. G.S. § 96-11.7(c).
The law aims to preserve the integrity of the trust and reserve funds that assist qualified unemployed workers and ensure a level of funding that will support high quality workforce services for the citizens of North Carolina.
Common SUTA Dumping Practices
- Movement of payroll from a high to a low tax rate
- Failure to report a transfer of a business
- Partial acquisition between common owners
- Payroll parking
- Use of shell companies