Arizona Recent Unemployment Legislation

Governor Jan Brewer signed House Bill 2519 on April 3, 2012.  Among other things,
this bill amends Arizona Revised Statutes § 23-769, the statute that established the Arizona
Job Training Tax (JTT).  The effect of the amendment is to restore the Unemployment Insurance

(UI) Tax rate-based exemptions to the JTT that were eliminated effective 7/1/2011 when the

Federal Unemployment Tax Act (FUTA) tax rate decreased from 6.2% to 6.0%.  

Restoration of the above-mentioned JTT exemptions will occur effective July 1, 2012, the beginning
of the third calendar quarter, for tax filing purposes.  Therefore, all UI
taxpayers are subject to JTT on taxable wages they pay from July 1, 2011 through June
30, 2012, but the following UI taxpayer groups are exempt from JTT on taxable wages
they paid prior to July 1, 2011 and on taxable wages they pay after June 30, 2012:

• Employers with a positive reserve ratio of at least 13 percent
  
• Employers with a positive reserve ratio of at least 12 percent
• Employers assigned the new employer tax rate

·     Employers with a negative reserve ratio

Click here to view the UI Tax rates that correspond to the
above reserve ratios in the current and prior years.  (Reimbursement
employers have always been and continue to be exempt
from JTT.)

UI taxpayers who were exempt from JTT in the first and second quarters of 2011 continue
to be exempt from JTT on taxable wages they paid in those quarters.  In other
words: (1) if such a taxpayer did not meet the $7,000 taxable wage base of an employee
in the first or second quarter of 2011, the taxpayer is subject to JTT only on taxable
wages paid to that employee in the third and fourth quarter of 2011; (2) if the taxpayer
did meet the taxable wage base of an employee in the first or second quarter of 2011,
the taxpayer is not subject to JTT on wages paid to that employee in the third or
fourth quarter of 2011.

UI taxpayers who are exempt from JTT in the third and fourth quarters of 2012 remain
subject to JTT on taxable wages paid in the first and second quarters of 2012.

The www.azuitax.com website
will be updated soon with an announcement of the change on the landing page and a
link to a detailed explanation of the change.

An article on the change will be included in the June 2012 Employer Newsletter, which
will be mailed to approximately 87,000 employers along with their Q2 2012 Unemployment
Tax and Wage Report forms (UC-018) in mid through late June.  Each of these DES-issued
forms has the applicable Surcharge rate for the recipient pre-printed on it at Line
7 of Section C, so if the employer is subject to the JTT, the pre-printed Surcharge
rate will be 0.60% (0.10% JTT plus 0.50% Special Assessment) and if not subject to
JTT, the rate will be 0.50% (Special Assessment only).

Employer Tax Services

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