SUTA Dumping

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

Report SUTA Dumping or Fraud