268.051 Employers taxes.
Subdivision 1. Payments. (a) Taxes shall accrue and become payable by each employer for each calendar year that the employer paid wages to employees in covered employment, except for:
(1) nonprofit organizations that elect to make payments in lieu of taxes as provided in section 268.053; and
(2) the state of Minnesota and political subdivisions, unless they elect to pay taxes as provided in section 268.052.
Each employer shall pay taxes quarterly, at the employer's assigned tax rate, on the taxable wages paid to each employee. The taxes shall be paid to the fund on or before the last day of the month following the end of the calendar quarter.
(b) The tax may be paid in an amount to the nearest whole dollar.
(c) When the tax for any calendar quarter is less than $1, the tax shall be disregarded.
Subd. 1a. Tax reports. (a) Every employer, except those nonprofit and government employers that have elected to make payments in lieu of taxes, shall submit a tax report on a form, or in a manner, prescribed by the commissioner on or before the last day of the month following the end of the calendar quarter, unless the employer meets the requirements for submitting tax reports annually under section 268.0511. An employer that fails to submit a tax report when due, or submits an incorrect tax report, shall be subject to section 268.057, subdivision 1.
(b) Each tax report shall include the total wages paid and the taxable wages paid that quarter, the amount of tax due, and any other information required by the commissioner.
(c) A tax report must be submitted for each calendar quarter even though no wages were paid or no tax is due.
Subd. 2. Computation of tax rates. (a) For each calendar year the commissioner shall compute the tax rate of each taxpaying employer that qualifies for an experience rating by adding the base tax rate to the employer's experience rating.
(b) The base tax rate shall be six-tenths of one percent if the amount in the fund is less than $200,000,000 on June 30 of the prior calendar year; or five-tenths of one percent if the fund is more than $200,000,000 but less than $225,000,000; or four-tenths of one percent if the fund is more than $225,000,000 but less than $250,000,000; or three-tenths of one percent if the fund is more than $250,000,000 but less than $275,000,000; or two-tenths of one percent if the fund is $275,000,000 but less than $300,000,000; or one-tenth of one percent if the fund is $300,000,000 or more.
(c) For the purposes of this subdivision the fund shall not include any money borrowed from the federal unemployment trust fund pursuant to section 268.194, subdivision 6.
Subd. 3. Computation of a taxpaying employer's experience rating. (a) For each calendar year, the commissioner shall compute an experience rating for each taxpaying employer who has been subject to this chapter for at least the 12 calendar months prior to July 1 of the prior calendar year.
(b) The experience rating shall be the ratio obtained by dividing 125 percent of the total unemployment benefits required under section 268.047 to be used in computing the employer's tax rate during the 60 calendar months ending on June 30 of the prior calendar year, by the employer's total taxable payroll for that same period.
(c) For purposes of paragraph (b), only that taxable payroll upon which taxes have been paid on or before September 30 of the prior calendar year may be used in computing an employer's experience rating.
(d) The experience rating shall be computed to the nearest one-tenth of a percent, to a maximum of 8.9 percent.
Subd. 4. Experience rating transfer. (a) When a taxpaying employer acquires the organization, trade or business or substantially all the assets of another employer, and there is 25 percent or more common ownership, directly or indirectly, between the predecessor and successor, the experience rating of the predecessor employer shall be transferred as of the date of acquisition to the successor employer for the purpose of computing a tax rate.
(b) When a taxpaying employer acquires a distinct severable portion of the organization, trade, business, or assets that is less than substantially all of the employing enterprises of another employer, and there is 25 percent or more common ownership, directly or indirectly, between the predecessor and successor, the successor employer shall acquire the experience rating attributable to the portion it acquired, and the predecessor employer shall retain the experience rating attributable to the portion that it has retained, if (1) the successor makes a written request to apply for the transfer of the experience rating attributable to the severable portion acquired from the predecessor within 180 calendar days from the date of acquisition, and (2) files an application within the time and in the manner prescribed by the commissioner that furnishes sufficient information to substantiate the severable portion and to assign the appropriate portion of the experience rating.
(c) The term "common ownership" for purposes of this subdivision includes ownership by a spouse, parent, child, brother, sister, aunt, uncle, niece, nephew, or first cousin, by birth or by marriage.
(d) If the successor employer under paragraphs (a) and (b) had an experience rating at the time of the acquisition, the transferred experience rating of the predecessor shall be combined with the successor's experience rating for purposes of computing a tax rate.
(e) If there has been a transfer of an experience rating under paragraph (a) or (b), employment with a predecessor employer shall not be considered to have been terminated if similar employment is offered by the successor employer and accepted by the employee.
(f) The commissioner, upon the commissioner's own motion or upon application of an employer shall determine if an employer is a successor within the meaning of this subdivision and shall send the determination to the employer by mail or electronic transmission. The determination shall be final unless an appeal is filed by the employer within 30 calendar days after the sending of the determination. Proceedings on the appeal shall be conducted in accordance with section 268.105.
(g) The commissioner may, as the result of any determination or decision regarding succession or nonsuccession, recompute the tax rate of all employers affected by the determination or decision for any year, including the year of the acquisition and subsequent years, that is affected by the transfer or nontransfer of part or all of the experience rating. This paragraph does not apply to rates that have become final before the filing of a written request to apply for the transfer of a severable portion of the experience rating under paragraph (b).
(h) Should an employer not have been in operation long enough to qualify for an experience rating under subdivision 3, paragraph (a), the experience rating for purposes of this subdivision shall consist of those factors that normally make up an experience rating, without the 12-month minimum.
(i) If the commissioner finds that a transaction was done, in whole or in part, to avoid an experience rating or the transfer of an experience rating, the commissioner may transfer all or part of the experience rating regardless of the requirements or limitations of paragraph (a). This shall include the transferring of employees from the payroll of an employer with a higher experience rating to the payroll of an employer with a lower experience rating.
(j) Regardless of paragraph (a), if there is an acquisition or merger of a publicly held corporation by or with another publicly held corporation the experience ratings of the corporations shall be combined as of the date of acquisition or merger for the purpose of computing a tax rate.
Subd. 5. Tax rate for new employers. (a) Each taxpaying employer that does not qualify for an experience rating under subdivision 3, paragraph (a), except employers in a high experience rating industry, shall be assigned a tax rate the higher of (1) one percent, or (2) the state's average cost rate. For purposes of this paragraph, the state's average cost rate shall be computed annually by dividing the total amount of unemployment benefits paid all applicants during the 60 calendar months prior to July 1 of each year by the total taxable wages of all taxpaying employers during the same period. This rate for new employers shall be applicable for the calendar year following the computation date.
(b) Each taxpaying employer in a high experience rating industry that does not qualify for an experience rating under subdivision 3, paragraph (a), shall be assigned a tax rate of 8.0 percent, plus the applicable base tax rate.
An employer is considered to be in a high experience rating industry if:
(1) the employer is engaged in residential, commercial, or industrial construction, including general contractors;
(2) the employer is engaged in sand, gravel, or limestone mining;
(3) the employer is engaged in the manufacturing of concrete, concrete products, or asphalt; or
(4) the employer is engaged in road building, repair, or resurfacing, including bridge and tunnels and residential and commercial driveways and parking lots.
Subd. 6. Notice of tax rate. (a) The commissioner shall notify each employer by mail or electronic transmission of the employer's tax rate as determined for any calendar year. The notice shall contain the tax rate and the factors used in determining the employer's experience rating. Unless a protest of the rate is made, the assigned rate shall be final except for fraud and shall be the rate at which taxes shall be paid. The tax rate shall not be subject to collateral attack by way of claim for a credit adjustment or refund, or otherwise.
(b) If the legislature, subsequent to the sending of the tax rate, changes any of the factors used to determine the rate, the earlier notice shall be void. A new tax rate based on the new factors shall be computed and sent to the employer.
(c) A review of an employer's tax rate may be obtained by the employer filing, in a manner prescribed by the commissioner, a protest within 30 calendar days from the date the tax rate notice was sent to the employer. Upon receipt of the protest, the commissioner shall review the tax rate to determine whether or not there has been any clerical error or error in computation. The commissioner shall either affirm or make a redetermination of the rate and a notice of the affirmation or redetermination shall be sent to the employer by mail or electronic transmission. The affirmation or redetermination shall be final unless the employer files an appeal within 30 calendar days after the date the affirmation or redetermination was sent. Proceedings on the appeal shall be conducted in accordance with section 268.105.
(d) The commissioner may at any time upon the commissioner's own motion correct any error in the computation or the assignment of an employer's tax rate.
Subd. 7. Tax rate buydown. (a) Any taxpaying employer who has been assigned a tax rate based upon an experience rating may, upon the voluntary payment of an amount equivalent to any portion or all of the unemployment benefits used in computing the experience rating plus a surcharge of 25 percent, obtain a cancellation of unemployment benefits used equal to the payment made, less the surcharge. Upon the payment, the commissioner shall compute a new experience rating for the employer, and determine a new tax rate.
(b) Voluntary payments may be made only during the 30 calendar day period immediately following the date of sending of the notice of tax rate. This period may be extended, upon a showing of good cause, but in no event shall a voluntary payment be allowed after 120 calendar days from the beginning of the calendar year for which the tax rate is effective.
(c) Voluntary payments made within the time required will not be refunded unless a request is made in writing within 30 calendar days after sending of the notice of the new tax rate.
Subd. 8. Special assessment for interest on federal loan. (a) If on October 31 of any year, the commissioner, in consultation with the commissioner of finance, determines that an interest payment will be due during the following calendar year on any loan from the federal unemployment trust fund under section 268.194, subdivision 6, a special assessment on taxpaying employers will be in effect for the following calendar year. The legislature authorizes the commissioner, in consultation with the commissioner of finance, to determine the appropriate level of the assessment, from two percent to eight percent of the quarterly unemployment taxes due, that will be necessary to pay the interest due on the loan.
(b) The special assessment shall be placed into a special account from which the commissioner shall pay any interest that has accrued on any loan from the federal unemployment trust fund provided for under section 268.194, subdivision 6. If, at the end of each calendar quarter, the commissioner, in consultation with the commissioner of finance, determines that the balance in this special account, including interest earned on the special account, is more than is necessary to pay the interest which has accrued on any loan as of that date, or will accrue over the following calendar quarter, the commissioner shall immediately pay to the fund the amount in excess of that necessary to pay the interest on any loan.
HIST: Ex1936 c 2 s 4; 1937 c 306 s 2; 1939 c 443 s 3; 1941 c 554 s 3; 1943 c 650 s 2; 1945 c 376 s 3; 1947 c 32 s 1-8; 1947 c 432 s 3-5,11; 1947 c 600 s 7; 1949 c 526 s 1; 1949 c 605 s 3-6,17,18; 1951 c 442 s 2; 1953 c 97 s 5,6,8; 1953 c 288 s 1; 1955 c 380 s 2-4,6; 1957 c 25 s 1; 1957 c 873 s 2; 1959 c 702 s 2-4; 1965 c 45 s 40; 1965 c 741 s 6-11; 1967 c 573 s 3; 1967 c 617 s 1; 1967 c 856 s 1; 1969 c 3 s 1; 1969 c 567 s 3; 1969 c 854 s 6; 1971 c 860 s 1; 1971 c 942 s 3-6; 1973 c 254 s 3; 1973 c 599 s 2-4; 1975 c 336 s 6-10; 1977 c 4 s 4,5; 1977 c 297 s 6-11; 1977 c 430 s 25 subd 1; 1977 c 455 s 82; 1978 c 674 s 60; 1979 c 181 s 4-8; 1980 c 508 s 2-7; 1Sp1982 c 1 s 5-12; 1983 c 216 art 1 s 87; 1983 c 247 s 112; 1983 c 372 s 9-15; 1985 c 248 s 70; 1Sp1985 c 14 art 9 s 75; 1986 c 444; 1986 c 451 s 1; 1987 c 242 s 1; 1987 c 362 s 9-12; 1987 c 385 s 10-18; 1989 c 65 s 3-5; 1989 c 209 art 2 s 1; 1992 c 484 s 4-7; 1994 c 483 s 1; 1994 c 488 s 8; 1995 c 54 s 3-7; 1996 c 417 s 5-7,31; 1997 c 66 s 11-15,17,18,20,21,79; 1998 c 265 s 13; 1999 c 107 s 23-28,66; 2000 c 343 s 4; 2001 c 175 s 12-15; 2002 c 380 art 1 s 1