§ 34-8-153 - Liability of succeeding employer; computation of rate of contributions; transfers between employers with substantially common ownership, management, or control; transfers made for the p
O.C.G.A. 34-8-153 (2010)
34-8-153. Liability of succeeding employer; computation of rate of contributions; transfers between employers with substantially common ownership, management, or control; transfers made for the purpose of obtaining a lower rate of contribution; penalties for violations
(a) Subject to the provisions of subsections (g) and (h) of this Code section, any corporation, partnership, individual, or other legal entity who acquires by purchase, merger, consolidation, or other means substantially all of the trade, business, or assets of any employer and who thereafter continues the acquired trade or business shall be deemed to be a successor to the employer from whom the trade or business was acquired. The successor shall acquire the experience rating record of the predecessor except as otherwise provided in this Code section or in the rules and regulations of the Department of Labor. If the successor is not already an employer at the time of the acquisition, the rate of contributions applicable to the predecessor shall continue to be applicable to the successor; provided, however, if the existing rate of contributions of the predecessor exceeds the new employer rate as specified in Code Section 34-8-151, the successor shall be assigned a new employer rate of contributions; in such event, the experience of the predecessor shall not be considered for purposes of rate calculations and the successor shall be otherwise treated as a new employer.
(b) Subject to the provisions of subsections (g) and (h) of this Code section, if the successor is already an employer at the time of the acquisition, the rate of contributions applicable to the successor shall continue until the end of the quarter in which the acquisition occurred. The rate of contributions applicable to the successor beginning on the first day of the quarter following the acquisition will be determined by the combined experience of the predecessor and successor as of the applicable computation date; provided, however, the experience of the predecessor shall not be combined with that of the successor for purposes of rate calculation if the predecessor's rate of contributions immediately preceding the acquisition exceeded the rate already in effect for the successor; in such event, the experience of the predecessor shall not be considered for purposes of rate calculations unless this combination of experience results in a reduction of rates.
(c) Subject to the provisions of subsections (g) and (h) of this Code section, any employing unit which acquires by any means any clearly identifiable or separable portion of the trade or business of an employer and is an employer at the time of the acquisition or becomes an employer within six months from the end of the quarter in which the acquisition is made may be deemed to be a partial successor to the employer from whom the portion of the trade or business was acquired. A portion of the predecessor's experience rating records which are attributable to the portion of trade or the business which was acquired may be transferred to the successor. Mutual consent of both parties must be given to effectuate the partial transfer. The Commissioner shall prescribe by regulation the time frame for notification to the department of partial acquisitions and the method by which the portion of the experience rating record to be transferred will be determined.
(d) Subject to the provisions of subsections (g) and (h) of this Code section, if the conditions of subsection (c) of this Code section are met and the partial successor is not already an employer at the time of the acquisition, the rate of contributions applicable to the predecessor shall be applicable to the successor. Future rates will be determined by combining the transferred portion of the predecessor's experience rating record with the successor's own experience rating record as of the applicable computation date.
(e) Subject to the provisions of subsections (g) and (h) of this Code section, if the conditions of subsection (c) of this Code section are met and the partial successor is already an employer at the time of the acquisition, the rate of contributions applicable to the successor shall continue until the end of the quarter in which the acquisition occurred. The rate of contributions applicable to the successor beginning on the first day of the quarter following the acquisition will be determined by combining the transferred portion of the predecessor's experience rating record with the successor's own experience rating record as of the applicable computation date.
(f) Nothing in this Code section shall be construed to affect liens which are created pursuant to Code Section 34-8-167.
(g) Notwithstanding any other provision in this chapter to the contrary, effective July 1, 2006:
(1) If an employer transfers its trade or business, or any portion thereof, to another employer and, at the time of the transfer, there is substantially common ownership, management, or control of the two employers then the rate of contributions attributable to the predecessor shall be transferred to the successor employer to whom such business is so transferred. The rates of contributions of both employers shall be recalculated and made effective immediately upon the date of the transfer of the trade or business.
(2) Whenever the successor is not already an employer at the time of the acquisition, the unemployment experience of the acquired business shall not be transferred to the successor if the Commissioner determines that the successor acquired the business solely or primarily for the purpose of obtaining a lower rate of contribution. Instead, the successor shall be assigned the new employer rate under Code Section 34-8-151. In determining whether the trade or business was acquired solely or primarily for the purpose of obtaining a lower rate of contributions, the Commissioner shall use objective factors which may include the following:
(A) The cost of acquiring the trade or business;
(B) Whether the successor actually continued the business enterprise of the acquired trade or business;
(C) How long the acquired trade or business was continued; and
(D) Whether or not a substantial number of new employees were hired for the performance of duties unrelated to the business activity conducted by the predecessor prior to acquisition.
(h)(1) Any person who knowingly violates or attempts to violate subsection (g) of this Code section or any other provision of this chapter related to determining the assignment of a rate of contributions or any person who knowingly advises another person in a manner that results in a violation of such provision shall be subject to the following penalties:
(A) If the person is an employer, then such employer shall be assigned the highest rate assignable under this chapter for the rate year during which such violation or attempted violation occurred and the three rate years immediately following that rate year; provided, however, that if:
(i) The person's business is already at the highest rate; or
(ii) If the amount of increase in the rate of contributions for such person would be less than 2 percent for such year,
then a penalty rate of contributions of 2 percent of taxable wages shall be imposed for such year;
(B) If the person is not an employer, such person shall be subject to a civil monetary penalty of not more than $5,000.00 per violation. Any such fine collected shall be deposited in the penalty and interest account established under Code Section 34-8-92.
(2) For the purposes of this subsection, the term "knowingly" means having actual knowledge of or acting with deliberate ignorance or reckless disregard for the prohibited act or omission.
(3) For the purposes of this subsection, the term "violates or attempts to violate" includes, but is not limited to, intent to evade, misrepresentation, and willful nondisclosure.
(4) For the purposes of this subsection, the term "person" shall have the meaning given such term by Section 7701(a)(1) of the Internal Revenue Code of 1986, as amended.
(5) In addition to the penalty imposed by paragraph (1) of this subsection, any violation of this Code section may be prosecuted as a felony under Code Section 16-10-20.
(6) The Commissioner shall establish procedures to identify the occurrence of any transfer or acquisition of a business that violates any provision of this Code section.
(i) For the purposes of this Code section and administration of the Employment Security Law, the terms "trade, business, or assets" and "trade or business" shall include:
(1) The employer's work force or any part of the employer's work force; and
(2) Any part of the employer's trade, business, or assets, whether or not clearly identifiable or separable within the meaning of subsection (c) of this Code section.
Tax liability under Chapter 7 of Title 48 shall not be affected by the definitions of "trade, business, or assets" and "trade or business" in this Code section.