When buying or selling a business in Wisconsin, the transfer may affect your unemployment insurance. For example, if you purchase at least 25% of an existing business in Wisconsin, you may continue using the unemployment insurance account of the previous owner if you choose. The previous owner’s low unemployment insurance rate may be attractive, decreasing the amount of taxes you pay.

If you choose continued use of the previous owner’s unemployment insurance account, ensure the previous owner paid all previous taxes owed and that you make timely application. See http://dwd.wisconsin.gov/UITAX/trans.htm for application deadlines. Also investigate whether any former employees are currently receiving unemployment benefits; if former employees currently receive benefits, these payments get charged to the account you assume. This may cause rate changes in the future.

If you are a current Wisconsin employer, the rate of any account assumed is combines with your current rate for an adjusted new unemployment insurance rate. If you choose not to assume an unemployment insurance account, use your current account if you already have one. Wisconsin unemployment insurance assigns new accounts to those without a previous account.

When You Must Assume an Unemployment Insurance Account

Spouses, parents and children must take over the unemployment insurance account of a business transferred to them. A business changing entity types, current partial owners assuming additional ownership and subsidiaries merging with a parent corporation must also continue use of the previous unemployment insurance account.

When a business transfers ownership, the Wisconsin Unemployment Insurance agency must be notified, regardless of whether the new ownership continues using the previous unemployment insurance account.

When s Business Transfers Occur:

Sales, leases, business reorganizations, mergers, consolidations, foreclosures, inheritance and bankruptcies usually signal a business transfer.

Sales of corporate stock, corporate name changes, transfers of employees or payroll and sales of assets in the normal course of business are not business transfers.