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Home > Unemployment Insurance > Tax & Accounting > Business Transfers & Unemployment Insurance - This page is based on a pamphlet "Business Transfers & Unemployment Insurance", UCT-8258-P, (R. 9/99)

WISCONSIN UNEMPLOYMENT INSURANCE
BUSINESS TRANSFERS & UNEMPLOYMENT INSURANCE

Changes of Business Ownership

This pamphlet answers basic questions about how buying or selling a business can affect an employer's unemployment tax rate.

email: taxnet@dwd.state.wi.us 
Internet: http://www.dwd.state.wi.us/ui
UCT-8258-P, (R. 9/99)
Example of Business Transfers & Unemployment Insurance pamphlet

WHEN YOU BUY A BUSINESS
When you buy a business, you may have the option of taking over the business's unemployment account. Your decision can have a major effect on your unemployment tax rate. If the owner has a low tax rate, and you take over that account, you may pay less in taxes.

If you buy all or part of a business that is covered by Wisconsin unemployment insurance law, you may apply to take over the account if you:
  • File a timely application (See deadlines), and
  • Continue or resume the same business.

WHEN YOU SELL A BUSINESS
The new owner of the business may have the option of taking over your account. The balance in the account can be transferred to the new owner and your account closed.

If the new owner chooses not to take over your account, you will be able to use your account again if you go back into business within two years.  (Return to Top)

QUESTIONS?  NEED INFORMATION?

Call the Employer Service Team 608/261-6700

or  write:

Unemployment  Insurance
P.O. Box 7942, Madison, WI 53707

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WHEN YOU MUST TAKE OVER AN ACCOUNT
A new owner is required to take over the account when:
  • A transfer of ownership takes place between husband and wife or parent and child;
  • A sole proprietor incorporates a business;
  • A subsidiary corporation merges with a parent corporation;
  • Seller and buyer have common ownership or control.

YOU MUST NOTIFY UNEMPLOYMENT INSURANCE
When you buy or sell a business, you must let us know within 30 days. In most cases, you can report by phone at 608/261-6700. We may also ask you to fill out a Report of Business Transfer or other reports.

DEADLINES
If the date of change is: You must apply by:
Jan. 1 to March 31 July 31
April 1 to June 30 Oct. 31
July 1 to Sept. 30 Jan. 31
Oct. 1 to Dec. 31 April 30 (Return to Top)
QUESTIONS YOU SHOULD ASK BEFORE YOU DECIDE TO BUY A BUSINESS

Has the seller made all the required payments?
If not, you may be liable for any unpaid unemployment taxes.

If you take over the account, will your tax rate be lower than it would be if you just opened a new account?
Possibly, if you are not an employer covered by the unemployment insurance law and the seller's tax rate is low. If you choose not to take over the account, you will be assigned a new employer tax rate. If you are a covered employer, the seller's experience will be combined with yours to figure a future tax rate.

Are any former employees of the seller drawing unemployment benefits from the seller's account?
If they are, and you decide to or are required to take it over, those payments will be charged to your account. This could result in a higher tax rate in the future.

What happens if you decide not to take over the seller's account?
If you do not have an account, you will be assigned one. If you already have an account, you will continue to report all wages using the same tax rate you already have.

What if only part of a business is sold?

If the sale involves at least 25% of a business, you may apply for part of the seller's account.
AT A GLANCE

BUSINESS TRANSFERS MOST OFTEN OCCUR THROUGH:
  • Sale or lease
  • Reorganization
  • Merger
  • Consolidation
  • Foreclosure
  • Inheritance
  • Bankruptcy

NOT BUSINESS TRANSFERS:
  • Sale of corporate stock
  • Corporate name change
  • Sale of assets in the ordinary course of business
  • Transfer of employees or payroll only

If you are unsure about your unemployment tax, contact us at 608/261-6700

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The Department of Workforce Development (DWD) is an equal opportunity service provider. If you need assistance to gain access to services or materials in an alternative format, please contact us.

State of Wisconsin
Department of Workforce Development
Unemployment Insurance
Bureau of Tax and Accounting
P.O. Box 7942, Madison, WI 53707
Employer Services Team: 608/261-6700
FAX: 608/267-1400
TTY: 608/267-0477
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Updated October 21, 2002
Division of Unemployment Insurance, Bureau of Tax and Accounting
Content Contact: Tax and Accounting Staff