Acquiring a business can affect an employer's unemployment insurance tax rate if they share 25 percent or more common ownership with the predecessor employer or there is substantially common management or control between the predecessor and successor employers. Common ownership includes ownership by a spouse, parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece, nephew, or first cousin, by birth or marriage. Common ownership is assumed if both the predecessor and successor are publicly held corporations.
If an employer acquires all or part of the organization, trade, business or assets of a predecessor and they share 25 percent or more common ownership with that predecessor or there is substantially common management or control between the predecessor and successor employers, the related factors in the predecessor's experience rating account (i.e. the benefits paid charges and taxable payroll associated with the percentage acquired) will automatically be transferred to the successor's account. The predecessor's taxable wages and benefits paid charges will be included when computing the successor's experience rate in future years.
If the successor acquires only a portion of the predecessor's business, only the related portion of the predecessor's taxable wages and benefits paid charges will be used to calculate the successors future tax rate(s). No transfer will occur without common ownership unless it is found that ownership was transferred to avoid an unfavorable tax rate.