Where does Missouri rank on unemployment insurance taxes

April 27,2022 - Unemployment insurance (UI) taxes have important implications for a state’s business climate. Unemployment insurance is a joint federal-state social insurance program that finances benefits for recently unemployed workers through taxes on employers.

State UI tax systems use variable-rate structures that impose different rates depending on the age of a business, its layoff history, and the health of the state’s UI trust fund, among other factors. According to the Tax Foundation, one of the most harmful aspects of UI taxes is that financially troubled businesses, for which layoffs may be a matter of survival, are shifted into higher tax rate schedules when they can least afford to pay a higher tax bill. Well-designed UI tax systems emphasize greater stability and predictability, especially in times of economic downturn.

On this year’s Index, the states with the best-scoring unemployment insurance tax systems are Oklahoma, Florida, Delaware, Missouri, Louisiana, and Mississippi. The worst-structured UI tax systems are found in Massachusetts, Rhode Island, Kentucky, Idaho, Maryland, and Nevada.

Missouri comes in at 4th just behind Delaware. Missouri was ranked 7th in last years index and 9th in 2020. You can see that full chart and report here.

To read more about how UI tax systems are evaluated in the Index, click here.