New Mexico businesses facing unemployment insurance tax hike

Business

NEW MEXICO (KRQE) – New Mexico businesses have been struggling to stay open during the pandemic and are barely hanging on with capacity limits. Now, many of them are seeing a jump in their taxes and one local lawmaker is saying ‘enough is enough.’

Thousands of business owners across the state are seeing their tax rates go up that fund unemployment insurance. Some say it’s a blow to small businesses that are still recovering from the loss in revenue because of the pandemic.

“It’s one of the worst things we could’ve done to our small businesses. We’ve had them shut down for over a year or at limited capacity and now we’ve added a tax hike to deal with the unemployment insurance that, throughout no fault of their own, some of their employees had to go on unemployment because we as a government told them they had to shut down,” said Sen. Craig Brandt, a state senator representing District 40 in Sandoval County. “It’s just breaking the back of already struggling businesses.”

Brandt says the tax hike is impacting businesses that mostly have to limit or shut down services during the pandemic, like restaurants and retail shops. Those rates and premiums are partially based on employee turnover, but the state pandemic relief law passed during the 2020 special session would omit any layoffs from March 2020 through June of this year from being considered in setting the rates. Still, some businesses say they’re seeing an increase in those tax rates, even as they struggle to hire employees back.

“I’ve talked to some of the Small Business Association leaders about what they’re hearing from their businesses and that’s just the main thing is that they can’t even get employees to fully reopen,” said Brandt. “They’re having a hard time keeping their normal business hours, in fact, a lot of them have had to shrink their normal business hours because they don’t have enough employees to be able to open.”

Around 8,000 businesses in the state were recently notified their rates would increase, but the amount varies by business. KRQE News 13 reached out to the New Mexico Department of Workforce Solutions. They say the rates were issued back in November and are under review. The deadline for employers to pay has been extended until May 30. NMDWS says the tax rate is based on a three-year average so some of those seeing an increase in rates could be because of changes that happened in the years before the pandemic.

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