2006 Code of Virginia § 60.2-536.1 - (Effective January 1, 2007 - see Editor\'s note) Transfers for the purpose of obtaining a lower une...

60.2-536.1. (Effective January 1, 2007 - see Editor's note) Transfers forthe purpose of obtaining a lower unemployment compensation tax rate;assignment of rates.

A. If an employer shall transfer any trade or business to another employerwhere, at the time of transfer, there is substantially common ownership,management, or control of the trade or business, then the unemploymentexperience attributable to the transferred business shall also be transferredto, and combined with the unemployment experience attributable to, theemployer to whom such business is transferred. If the sole or primary purposeof such transfer is to obtain a lower unemployment tax rate, that employershall be subject to the penalties established by 60.2-536.3.

B. If an employer shall transfer any trade or business to a person who is nototherwise an employer at the time of such transfer, and the sole or primarypurpose of such transfer is to obtain a lower unemployment tax rate:

1. The unemployment experience of the acquired business shall not betransferred to such person; instead, such person shall be assigned the higherof the transferred business' calculated rate or the new employer rate under 60.2-526; and

2. Such person shall be subject to the penalties established by 60.2-536.3.

C. Any person who shall knowingly advise another person to engage in atransfer of any trade or business, where the sole or primary purpose of suchtransfer is to obtain a lower unemployment tax rate, shall be subject to thepenalties established by 60.2-536.3.

D. The Commission shall establish methods to identify and investigate thetransfer or acquisition of a business for purposes of this section.

1. For the purposes of determining whether there is "substantially commonownership, management, or control of two or more employers," the Commissionshall consider all relevant facts and circumstances, including the extent ofcommonality or similarity of: (i) ownership, (ii) any familial relationships,(iii) principals or corporate officers, (iv) organizational structure, (v)day-to-day operations, (vi) assets and liabilities, and (vii) stated businesspurpose.

2. For the purposes of determining whether a business was transferred solelyor primarily to obtain a lower unemployment tax rate, the Commission shallconsider the facts and circumstances of the transfer, including: (i) the costof acquiring the business, (ii) how long such business was continued, and(iii) whether a substantial number of new employees was hired to performduties unrelated to the business activity conducted prior to the transfer.

(2005, cc. 47, 91.)