                                 CODE OF VIRGINIA

TRANSFERS FOR THE PURPOSE OF OBTAINING A LOWER UNEMPLOYMENT COMPENSATION TAX
RATE; ASSIGNMENT OF RATES (§ 60.2-536.1)

A. If an employer shall transfer any trade or business to another employer
where, at the time of transfer, there is substantially common ownership,
management, or control of the trade or business, then the unemployment
experience attributable to the transferred business shall also be transferred
to, and combined with the unemployment experience attributable to, the employer
to whom such business is transferred. If the sole or primary purpose of such
transfer is to obtain a lower unemployment tax rate, that employer shall be
subject to the penalties established by &#xA7; 60.2-536.3.

B. If an employer shall transfer any trade or business to a person who is not
otherwise an employer at the time of such transfer, and the sole or primary
purpose of such transfer is to obtain a lower unemployment tax rate:

   1. The unemployment experience of the acquired business shall not be
   transferred to such person; instead, such person shall be assigned the higher
   of the transferred business&#8217; calculated rate or the new employer rate
   under &#xA7; 60.2-526; and

   2. Such person shall be subject to the penalties established by &#xA7;
   60.2-536.3.

C. Any person who shall knowingly advise another person to engage in a transfer
of any trade or business, where the sole or primary purpose of such transfer is
to obtain a lower unemployment tax rate, shall be subject to the penalties
established by &#xA7; 60.2-536.3.

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

   1. For the purposes of determining whether there is &#8220;substantially
   common ownership, management, or control of two or more employers,&#8221; the
   Commission shall consider all relevant facts and circumstances, including the
   extent of commonality 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 business purpose.

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

HISTORY: 2005, cc. 47, 91.