What are some of the methods of SUTA Dumping?
Listed below are a few of the tax avoidance schemes used by businesses which are prohibited under the new SUTA Dumping law. Employing units should be aware that these practices constitute SUTA Dumping and that there are serious ramifications for engaging in these activities • Purchased Shell Transaction by Existing Business. A business with a large payroll and a high UI rate purchases a corporate shell and a small payroll is reported each year until a low or minimum UI rate is achieved. Once the low rate is achieved, the business transfers its employee/payroll to the purchased entity so that the entire payroll is taxed at the lower rate. • Purchased Shell Transaction by a Person Who Is Not An Employing Unit. A person who is not an employing unit purchases a corporate shell with a low UI rate instead of forming a new business, solely or primarily for the purpose of obtaining a lower UI rate. • Affiliated Shell Transaction. A new corporation is registered, and a small payroll is reported
