24.11.2205    EXPERIENCE-RATING RECORD TRANSFER

(1) When a new business entity is formed and it acquires assets, employees, business, organization, or trade from another employer, the new business entity is classified as a successor employer. The procedures for transferring an employer's experience-rating record are described in 39-51-1219, MCA. For purposes of this rule, predecessor employer and successor employer are used in the same manner and have the same meaning as those terms have in 39-51-1219, MCA.

(2) Except as otherwise provided in this rule, an application for transferring the experience-rating record is automatically sent to the successor employer if, within 90 days of the change of ownership, the department discovers that an account involves a predecessor employer.

(3) An experience-rating record is automatically transferred from the predecessor employer to the successor employer if both employers are under substantially common ownership, management, or control. An experience-rating record includes the amount of contributions paid, benefits charged, and taxable wages reported.

(a) Substantially common ownership, management, or control is present when a person serves in any of the following positions for both the predecessor and successor:

(i) sole proprietor (includes spouse, children, and parents of sole proprietor);

(ii) partner of a partnership;

(iii) member of a limited liability company;

(iv) chief executive officer;

(v) chief financial officer;

(vi) any corporate officer;

(vii) any shareholder owning, directly or indirectly, more than 50 percent of a corporation's stock; or

(viii) board members.

(4) A request for transfer of the experience-rating record may be approved if:

(a) all delinquent reports are filed;

(b) all past due taxes are satisfied; and

(c) the successor employer files an employer registration form.

(5) In the case of partial transfer of the trade or business of an employing entity (referred to as the predecessor employer) to another entity (referred to as the successor), the portion of the experience-rating record transferred from the predecessor employer to the successor must be determined in the same ratio as:

(a) the portion of the payroll transferred to the successor in the current and the previous four calendar quarters immediately preceding the date of transfer; to

(b) the total payroll of the predecessor employer would have had during that same period, had the transfer not occurred.

(6) The penalty assessed in 39-51-1219, MCA, is based on the taxable payroll of the successor following the transfer of the experience-rating record.

(7) A transfer of the experience-rating record between a professional employer organization and its client is not allowed unless the client and the professional employer organization have common ownership, management, or control.

 

History: 39-8-201, 39-51-301, 39-51-302, MCA; IMP, 39-8-201, 39-51-1219, MCA; NEW, 1988 MAR p. 2723, Eff. 1/1/89; AMD, 1995 MAR p. 1950, Eff. 10/1/95; TRANS, from Dept. of Labor and Industry and AMD, 2001 MAR p. 1650, Eff. 8/24/01; TRANS, from Dept. of Revenue and AMD, 2004 MAR p. 2808, Eff. 11/19/04; AMD, 2006 MAR p. 2411, Eff. 10/6/06; AMD, 2018 MAR p. 638, Eff. 4/1/18; AMD, 2018 MAR p. 2525, Eff. 1/1/19.