02. Employer Liability, Tax Rate, Successorship

Zgol v UIA – 2.27

Zgol v UIA
Digest no. 2.27

Section 15

Cite as: Zgol v UIA, Unpublished Opinion of the Oakland County Circuit Court, Issued April 27, 2005 (Docket No. 2004-063262-AE).

Appeal pending: No
Claimant: N/A
Employer: Zgol, dba Berkley Amoco
Docket no.: 2839
Date of decision: April 27, 2005

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HOLDING: Under Section 15(g), a former employer who sold business to current employer can be assessed for employment taxes that were due and not paid when he still owned the business.

FACTS: Zgol owned Berkley Amoco until December 1999, when he sold 100% of the business assets to another entity. On June 10, 2003, the UIA issued an assessment against Zgol for unpaid employment contributions that were due between 1996 and 1998, during which time he still owned the business. Zgol appealed to an ALJ, and during that hearing it was stipulated that Zgol had sold 100% of the assets, discontinuation of the business was timely filed, and the amount of the assessment was $5,639.96.

DECISION: The Board of Review decision to hold the former owner liable for the unpaid employment taxes during the time he still owned the business is upheld.

RATIONALE: Since Section 15(g) is ambiguous as to whether a former employer can be assessed unpaid employment taxes from the period when it still owned the business, the Court looked to statutory interpretation through analyzing both the enacting section of the Act and the declaration of policy.  Next, the Court determined that the unemployment system was considered to be “of vital importance to the health and welfare of the state’s citizenry,” which therefore indicates that “the legislature intended to create a system where employers could not escape payment by merely selling their business.”

Digest Author: Nick Phillips
Digest Updated: 8/14