Ohio Code 4141.48 – Acquisition of trade or business to lower contribution rate prohibited
(A) No person shall acquire the trade or business of an employer, or a portion thereof, solely or primarily for the purpose of obtaining a lower rate of contributions under sections 4141.09, 4141.23, 4141.24, 4141.241, 4141.242, 4141.25, 4141.26, and 4141.27 of the Revised Code.
Terms Used In Ohio Code 4141.48
- Another: when used to designate the owner of property which is the subject of an offense, includes not only natural persons but also every other owner of property. See Ohio Code 1.02
- Contributions: means the money payments to the state unemployment compensation fund required of employers by section 4141. See Ohio Code 4141.01
- Employer: means the state, its instrumentalities, its political subdivisions and their instrumentalities, Indian tribes, and any individual or type of organization including any partnership, limited liability company, association, trust, estate, joint-stock company, insurance company, or corporation, whether domestic or foreign, or the receiver, trustee in bankruptcy, trustee, or the successor thereof, or the legal representative of a deceased person who subsequent to December 31, 1971, or in the case of political subdivisions or their instrumentalities, subsequent to December 31, 1973:
(a) Had in employment at least one individual, or in the case of a nonprofit organization, subsequent to December 31, 1973, had not less than four individuals in employment for some portion of a day in each of twenty different calendar weeks, in either the current or the preceding calendar year whether or not the same individual was in employment in each such day; or
(b) Except for a nonprofit organization, had paid for service in employment wages of fifteen hundred dollars or more in any calendar quarter in either the current or preceding calendar year; or
(c) Had paid, subsequent to December 31, 1977, for employment in domestic service in a local college club, or local chapter of a college fraternity or sorority, cash remuneration of one thousand dollars or more in any calendar quarter in the current calendar year or the preceding calendar year, or had paid subsequent to December 31, 1977, for employment in domestic service in a private home cash remuneration of one thousand dollars in any calendar quarter in the current calendar year or the preceding calendar year:
(i) For the purposes of divisions (A)(1)(a) and (b) of this section, there shall not be taken into account any wages paid to, or employment of, an individual performing domestic service as described in this division. See Ohio Code 4141.01
- Person: includes an individual, corporation, business trust, estate, trust, partnership, and association. See Ohio Code 1.59
- Wages: means remuneration paid to an employee by each of the employee's employers with respect to employment; except that wages shall not include that part of remuneration paid during any calendar year to an individual by an employer or such employer's predecessor in interest in the same business or enterprise, which in any calendar year is in excess of nine thousand dollars on and after January 1, 1995; nine thousand five hundred dollars on and after January 1, 2018; and nine thousand dollars on and after January 1, 2020. See Ohio Code 4141.01
(B) In determining whether the trade or business was acquired solely or primarily for the purpose of obtaining a lower rate of contributions, the director shall use objective factors that may include all of the following:
(1) The cost of acquiring the trade or business;
(2) Whether the person continued the trade or business of the acquired trade or business;
(3) If the trade or business was continued, how long the trade or business was continued;
(4) Whether a substantial number of new employees were hired for performance of duties unrelated to the business activity conducted prior to the acquisition.
(C) If a person knowingly violates, attempts to violate, or advises another person in a way that results in a violation of division (A) of this section or any other provision of this chapter related to determining the assignment of a contribution rate, the person is subject to the following penalties:
(1) If the person is an employer, the director shall assign the employer the highest maximum rate or penalty rate assignable under this chapter for the rate year during which the violation or attempted violation occurred and the three rate years immediately following that rate year, except that, if the person’s business is already at the highest rate for any of those years, or if the amount of increase in the person’s rate would be less than two per cent for that year, then an additional penalty rate of contributions of two per cent of taxable wages shall be imposed for that year.
(2) If the person is not an employer, the director shall assess a fine of five thousand dollars.
(D) The director shall deposit any fine collected under division (C)(2) of this section into the special administrative fund established under section 4141.11 of the Revised Code.
(E) The director shall credit fifty per cent of amounts paid to the director under rates determined pursuant to division (C)(1) of this section to the individual employer’s account and fifty per cent to the mutualized account established pursuant to division (B) of section 4141.25 of the Revised Code.
(F) The director shall round the contribution rates the director determines under division (C)(1) of this section to the nearest tenth of one per cent.
(G) For purposes of this section:
(1) “Knowingly” means having actual knowledge of or acting with deliberate ignorance or reckless disregard for the prohibition involved.
(2) “Person” has the same meaning as under “The Internal Revenue Code of 1986,” 100 Stat. 2138, 26 U.S.C. § 7701.
(3) “Trade or business” includes the employer’s workforce.
(4) “Violates or attempts to violate” includes, but is not limited to, intent to evade, misrepresentation, or willful nondisclosure.