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A bill to reduce the unemployment tax hit on businesses this year has now passed both chambers of the Washington state Legislature.

The state House of Representatives unanimously passed this week after the Senate passed it last month.

Unemployment taxes are rising to refill the state’s Unemployment Trust Fund, which was all but depleted during the pandemic’s record joblessness. The trust fund pays out benefits to people who are out of work, and it is solely filled by these taxes on businesses.

“It’s not employers’ fault, it’s not small businesses’ fault that unemployment insurance was raised due to the pandemic,” said Rep. April Berg (D-Mill Creek) during House floor debate this week. “And as a result, this bill alleviates that, … this bill helps our small businesses at a time when they need it most.”

Washington’s Unemployment Trust Fund starting to bounce back in 2022

The bill would decrease the social unemployment tax over the next two years. In 2022, the tax would decrease by a third — from a maximum of 0.75% to 0.50%. It’s also expected to help the state’s smallest mom-and-pops next year by capping unemployment taxes on businesses with 10 or fewer employees.

“This is a bill that helps small businesses … it reduces the cap that all employers pay for [unemployment insurance],” Berg said.

The trust fund is bouncing back after hitting its low point late last year, and it is projected to get back to pre-pandemic levels by 2025.

“[The bill] won’t hurt our unemployment insurance fund, which has rebounded and is incredibly healthy,” Berg said.

Republicans applauded the Democrat-sponsored bill, but noted that they would like to see it go even further to help businesses.

“This will help small businesses — my concern here, a little bit, is that we should be helping them more,” said Rep. Larry Hoff (R-Vancouver).

However, he said that the bill is a great step for now.

“I recommend an enthusiastic yes on this bill and just hope that in some point in time, we can address this issue further,” Hoff said.

After a final approval by the Legislature as a whole, the bill just needs the governor’s signature to go into immediate effect.