States Use COVID-19 Relief Dollars to Hold Down Business Taxes

Governing: Governors and lawmakers in at least eight states have used millions of federal coronavirus relief dollars to protect businesses from tax increases as unemployment skyrockets.

They’re pushing relief dollars into unemployment insurance trust funds, which are funded by business taxes and pay out benefits to laid-off workers. If the funds start to run out of money — as they now are in many states — state and federal law triggers tax increases to replenish the accounts.

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