2003 Minnesota Statutes

     268.051 Employers taxes. 

    Subdivision 1.    Payments.  (a) Taxes and any 
 additional assessments, fees, or surcharges 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 
 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.  

 Each employer shall pay taxes quarterly, at the employer's 
 assigned tax rate, on the taxable wages paid to each employee.  
 The taxes and any additional assessments, fees, or surcharges 
 shall be paid to the trust fund on or before the last day of the 
 month following the end of the calendar quarter. 

    (b) The total payment due may be paid in an amount to the 
 nearest whole dollar. 

    (c) When the total payment due for any calendar quarter is 
 less than $1, it shall be disregarded. 

    Subd. 1a.    Tax reports.  (a) Every employer, except 
 those nonprofit and government employers that have elected to 
 make reimbursements, 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; 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) For each calendar year, the 
 commissioner shall compute an experience rating for each 
 taxpaying employer who has been subject to paying unemployment 
 taxes 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 48 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 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 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.  

    (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 8.0 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, along with any additional assessments, 
 fees, or surcharges, 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 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 

*   NOTE:  Subdivision 2, paragraph (c), as added by Laws 2003, 
*First Special Session chapter 3, article 1, section 2, is 
*effective January 1, 2005.  Laws 2003, First Special Session 
*chapter 3, article 1, section 2, the effective date.