1999 Minnesota Statutes

     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 making 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 minimum tax rate to the employer's experience 
 rating. 

    (b) The minimum 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.  The experience rating shall be the ratio 
 obtained by dividing 125 percent of the total benefits charged 
 to the employer's tax account during the period the employer has 
 been subject to this chapter, but not more than the 60 calendar 
 months ending on June 30 of the prior calendar year, by the 
 employer's total taxable payroll for the same period. 

    (b) For purposes of paragraph (a), 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. 

    (c) 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 record transfer.  (a) When 
 an 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 
 record 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 an 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 
 record attributable to the portion it acquired, and the 
 predecessor employer shall retain the experience rating record 
 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 record 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 total and 
 taxable wages and benefit charges to the successor for 
 experience rating purposes.  

    (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 record at the time of the acquisition, 
 the transferred record of the predecessor shall be combined with 
 the successor's record for purposes of computing a tax rate. 

    (e) If there has been a transfer of an experience rating 
 record 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 
 record.  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 record 
 under paragraph (b). 

    (h) The experience rating record for purposes of this 
 subdivision shall consist of those factors that make up an 
 experience rating, without the 12-month minimum required under 
 subdivision 3. 

    (i) If the commissioner finds that a transaction was done, 
 in whole or in part, to avoid an experience rating record or the 
 transfer of an experience rating record, the commissioner may 
 transfer all or part of the experience rating record 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 record to the payroll 
 of an employer with a lower experience rating record. 

    (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 rating records 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 
 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 minimum 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 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 benefits charged to the employer's 
 account, plus a surcharge of 25 percent, obtain a cancellation 
 of benefits charged to the account 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.    Solvency assessment.  (a) If the fund 
 balance is less than $150,000,000 on June 30 of any year, a 
 solvency assessment on taxpaying employers will be in effect for 
 the following calendar year.  The taxpaying employer shall pay 
 quarterly a solvency assessment of ten percent of the taxes due. 

    (b) The solvency assessment shall be placed into a special 
 account from which the commissioner shall pay any interest 
 accruing on any loan from the federal unemployment trust fund 
 provided for under section 268.194, subdivision 6.  If the 
 commissioner determines that the balance in this special account 
 is more than is necessary to pay the interest, the commissioner 
 shall pay to the fund the amount in excess of that necessary to 
 pay the interest. 

    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 

*   NOTE:  The amendment to subdivision 5 by Laws 1999, chapter 
*107, section 27, is effective January 1, 2001.  Laws 1999, 
*chapter 107, section 68.