2004 Minnesota Statutes

     268.051 Employers taxes. 

    Subdivision 1.    Payments.  (a) Unemployment insurance 
 taxes and any additional assessments, fees, or surcharges shall 
 accrue and become payable by each employer for each calendar 
 year on the taxable wages that the employer paid to employees in 
 covered employment, except for:  

    (1) nonprofit organizations that elect to make 
 reimbursements as provided in section 268.053; and 

    (2) the state of Minnesota and political subdivisions that 
 make reimbursements, unless they elect to pay taxes as provided 
 in section 268.052.  

    Except as allowed under section 268.0511, each employer 
 shall pay taxes quarterly, at the employer's assigned tax rate, 
 on the taxable wages paid to each employee.  The commissioner 
 shall compute the tax due from the wage detail report required 
 under section 268.044 and notify the employer of the tax due.  
 The taxes and any additional assessments, fees, or surcharges 
 shall be paid to the trust fund and must be received by the 
 department on or before the last day of the month following the 
 end of the calendar quarter. 

    (b) The tax amount computed, if not a whole dollar, shall 
 be rounded down to the next lower whole dollar. 

    (c) If for any reason the wages on the wage detail report 
 under section 268.044 are adjusted for any quarter, the 
 commissioner shall recompute the taxes due for that quarter and 
 assess the employer for any amount due or credit the employer as 
 appropriate. 

    Subd. 1a.    Payments by electronic payment required.  
 (a) Every employer that reports 500 or more employees in any 
 calendar quarter on the wage detail report required under 
 section 268.044 shall make any payments due under this chapter 
 and section 116L.20 by electronic payment. 

    (b) All third-party processors, paying quarterly taxes on 
 behalf of a client company, shall make any payments due under 
 this chapter and section 116L.20 by electronic payment. 

    (c) Regardless of paragraph (a) or (b), the commissioner 
 shall have discretion to accept payment by other means.  

    Subd. 2.    Computation of tax rates; additional 
 assessments.  (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 for the calendar year and any 
 additional assessments under this subdivision shall be 
 determined based upon the amount in the trust fund on March 31 
 of the prior year as a percentage of total wages paid in covered 
 employment.  The base tax rate shall be: 

    (1) one-tenth of one percent if the trust fund is equal to 
 or more than 0.75 percent; 

    (2) two-tenths of one percent if the trust fund is less 
 than 0.75 percent but equal to or more than 0.65 percent; 

    (3) three-tenths of one percent if the trust fund is less 
 than 0.65 percent but equal to or more than 0.55 percent; or 

    (4) four-tenths of one percent if the trust fund is less 
 than 0.55 percent. 

    (c) There shall be a "falling trust fund adjustment" to the 
 base tax rate for the calendar year if the amount in the trust 
 fund on March 31 of the prior year is less than 0.75 percent of 
 total wages paid in covered employment and: 

    (1) the amount in the trust fund on March 31 of the prior 
 year is ten percent or more below the amount in the trust fund 
 on March 31 of the year prior to that; or 

    (2) the amount in the trust fund on March 31 of the prior 
 year is greater than the amount in the trust fund on June 30 of 
 that same year. 

 If a "falling trust fund adjustment" is applicable, then the 
 base tax rate shall be 0.1 percent greater than otherwise 
 provided for under paragraph (b). 

    (d) In addition to the base tax rate under paragraph (b), 
 there shall be an additional assessment for the calendar year on 
 all quarterly unemployment taxes due from every taxpaying 
 employer if the amount in the trust fund on March 31 of the 
 prior year is less than .55 percent of total wages paid in 
 covered employment.  The assessment shall be as follows: 

    (1) a five percent assessment if the trust fund is less 
 than 0.55 percent but equal to or more than 0.45 percent; 

    (2) a ten percent assessment if the trust fund is less than 
 0.45 percent but equal to or more than 0.35 percent; or 

    (3) a 14 percent assessment if the trust fund is less than 
 0.35 percent. 

    (e) For the purposes of this subdivision, the trust fund 
 shall not include any money borrowed from the federal 
 unemployment trust fund pursuant to section 268.194, subdivision 
 6. 

    (f) For the purposes of this subdivision, total wages paid 
 in covered employment shall be those wages paid to all employees 
 in covered employment during the calendar year prior to the 
 March 31 date used in paragraph (b). 

    (g) The commissioner may compute any assessment under this 
 subdivision, and any assessment under subdivision 8, as a 
 percentage of the employer's experience rating and the base tax 
 rate, rounded to the nearest hundredth of a percent. 

    On tax rate notices sent under subdivision 6, any 
 assessments under this subdivision may be combined with any 
 special assessments for interest on federal loans provided for 
 in subdivision 8 into a single combined assessment. 

    Subd. 3.    Computation of a taxpaying employer's 
 experience rating.  (a) On or before each December 15, the 
 commissioner shall compute an experience rating for each 
 taxpaying employer who has been subject to paying unemployment 
 taxes for the 12 calendar months ending on the prior June 30.  
 The experience rating computed shall be applicable for the 
 following calendar year.  

    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 48 calendar months ending on the prior June 30, 
 by the employer's total taxable payroll for that same period. 

    (b) The experience rating shall be computed to the nearest 
 one-hundredth of a percent, to a maximum of 8.90 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 that percentage 
 of a predecessor's experience rating equal to that percentage of 
 the predecessor's employment positions it has obtained, and the 
 predecessor employer shall retain that percentage of the 
 experience rating equal to that percentage of the employment 
 positions that it has retained, if the successor files an 
 application by electronic transmission, in a format prescribed 
 by the commissioner, for the transfer of a percentage of the 
 experience rating of the predecessor within 180 calendar days 
 from the date of acquisition, that furnishes sufficient 
 information to substantiate the acquisition and to assign the 
 appropriate percentage 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 a protest 
 is filed by the employer within 30 calendar days after sending 
 the determination.  Upon receipt of a protest, the commissioner 
 shall review all available evidence and determine whether an 
 error has been made.  The commissioner shall either affirm or 
 make a redetermination on whether the employer is a successor 
 within the meaning of this subdivision and send the employer, by 
 mail or electronic transmission, the affirmation or 
 redetermination.  The affirmation or redetermination shall be 
 final unless an appeal is filed by the employer within 30 
 calendar days after the sending of the affirmation or 
 redetermination.  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 an application 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 paragraphs (a) and (b).  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 new 
 taxpaying employer that does not qualify for an experience 
 rating under subdivision 3, except new employers in a high 
 experience rating industry, shall be assigned, for a calendar 
 year, a tax rate the higher of (1) one percent, or (2) the tax 
 rate computed, to the nearest one-hundredth of a percent, by 
 dividing the total amount of unemployment benefits paid all 
 applicants during the 48 calendar months ending on June 30 of 
 the prior calendar year by the total taxable wages of all 
 taxpaying employers during the same period, plus the applicable 
 base tax rate and any additional assessments under subdivision 
 2, paragraph (d).  

    (b) Each new taxpaying employer in a high experience rating 
 industry that does not qualify for an experience rating under 
 subdivision 3, shall be assigned, for a calendar year, a tax 
 rate of 8.00 percent, plus the applicable base tax rate and any 
 additional assessments under subdivision 2, paragraph (d).  

    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.  

    (c) The commissioner shall send to the new employer, by 
 mail or electronic transmission, notice of the tax rate 
 assigned.  An employer may protest the assignment of a tax rate 
 in accordance with the procedures in subdivision 6, paragraph 
 (c). 

    Subd. 6.    Notice of tax rate.  (a) On or before each 
 December 15, the commissioner shall notify each employer by mail 
 or electronic transmission of the employer's tax rate, along 
 with any additional assessments, fees, or surcharges, for the 
 following calendar year.  The notice shall contain the base tax 
 rate and the factors used in determining the employer's 
 experience rating.  Unless a protest of the tax rate is made, 
 the computed tax 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 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 error in computation 
 or assignment of the tax rate.  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 compute a new tax rate.  

    (b) Voluntary payments may be made only by electronic 
 payment and must be received within 120 calendar days from the 
 beginning of the calendar year for which the tax rate is 
 effective. 

    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 trust fund the amount in excess of that necessary to 
 pay the interest on any loan. 

    Subd. 9.    Assessments, fees, and surcharges; treatment. 
  Any assessment, fee, or surcharge imposed under the Minnesota 
 Unemployment Insurance Law shall be treated the same as, and 
 considered as, a tax.  Any assessment, fee, or surcharge shall 
 be subject to the same collection procedures that apply to past 
 due taxes. 

    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; 
 1Sp2003 c 3 art 1 s 1-6; art 2 s 20; 2004 c 183 s 24-30 

*   NOTE:  The amendments to subdivisions 1, 1a, 3, 4, 5, and 7 
*by Laws 2004, chapter 183, sections 24 to 28 and 30, are 
*effective July 1, 2005.  Laws 2004, chapter 183, sections 24 to 
*28 and 30, the effective dates.