Tuesday, September 29, 2020

County rejects tax “holiday” option for employees

Daily Inter Lake | September 16, 2020 12:00 AM

The Flathead County commissioners voted Tuesday to not move forward with implementing a “tax holiday” that would have allowed the county to stop withholding payroll taxes paid by county employees beginning on Sept.1.

Issued by the federal government in late August as part of COVID-19 relief efforts, the holiday suspension period would have run from Sept. 1 through Dec. 31 and would have applied only to employees whose wages are less than $4,000 for a bi-weekly pay period, including salaried workers earning less than $104,000 per year. However, employers that suspend collection of employee payroll tax would collect additional amounts form workers’ paychecks from Jan. 1 through April 30 in 2021 in order to repay the tax obligation.

If Flathead County had chosen to move ahead with the tax holiday, the county also would have been responsible for paying the suspended portion of the payroll taxes. According to a staff report, this would have left the county with a “potential liability for those employees who may leave the county before the payroll taxes could be collected.”

In addition to the liability, the report states there “are many factors that will cause hardship to implement and then later collect the taxes.” For example, the county currently has seven unions and regular employees with different kinds of pay codes, which would make later collection complicated.

Commissioner Phil Mitchell cited concerns related to individuals’ abilities to properly budget for next spring when those taxes would have to be paid back.

“You’re going to save here, but double tax spending later,” Mitchell said. I think a lot of people would have a hard time budgeting the money.”

Commissioner Pam Holmquist agreed with Mitchell and added that the holiday would just be “way too complicated.”

Reporter Kianna Gardner can be reached at 758-4407 or kgardner@dailyinterlake.com