SUTA Successor Rules by State: When a Buyer Inherits the Seller's Unemployment Tax Rate (2026)

SUTA successor rules: 27 of 44 coded states hand the seller's record to an unrelated buyer

The registry codes one question for each jurisdiction: if a buyer with no ownership link to the seller takes over the whole business, does the seller's unemployment insurance experience follow it? In 27 of 44 jurisdictions read from official text, it does without any application.

Experience rating: A state's record of an employer's taxable payroll, contributions and benefit charges, used to set its state unemployment (SUTA) tax rate. A transfer moves that record, and with it the rate history, from seller to buyer.

Successor: The buyer or other acquirer that takes over a trade or business, or substantially all of its assets, and is treated by the state as standing in the seller's place for unemployment tax purposes.

Mandatory states use the word shall. Arizona's statute says the predecessor's account shall be transferred when an employing unit acquires the business or substantially all assets and continues it (Ariz. Rev. Stat. 23-733). Louisiana, Ohio, Vermont and Wyoming use the same structure.

Some mandatory states set a threshold. South Carolina defines substantially all as 95 percent or more of the business (S.C. Code 41-31-100); Michigan treats a transfer of less than 75 percent of assets as a transfer of business only if the parties act within 30 days after the quarter ends (Mich. Comp. Laws 421.22).

In 11 states the buyer has to ask for the seller's record, and the clock starts at closing

Optional states let the parties decide. That turns the seller's rate into something a buyer can accept or refuse, but only inside a filing window that is often 90 to 180 days.

Kansas lets a successor receive the predecessor's experience rating factors if it applies in writing within 120 days of the transfer (Kan. Stat. Ann. 44-710a). Idaho requires a joint application of seller and buyer within 180 days (Idaho Code 72-1351). Montana requires a joint application within 90 days (Mont. Code Ann. 39-51-1219).

Some optional states give the seller a say. North Dakota transfers experience only on request and lets the predecessor stop it with a written protest within 15 days (N.D. Cent. Code 52-04-08). Pennsylvania's application form must be signed by both the predecessor and the buyer, and an approved transfer is binding and irrevocable (form UC-15).

Wisconsin adds a size test: an unrelated transferee is a successor only if the transfer covers at least 25 percent of the seller's business and the transferee files a written application by the first full quarter's contribution due date (Wis. Stat. 108.16(8)).

Minnesota, Texas and Delaware let an unrelated buyer start fresh

Three coded jurisdictions transfer experience only where buyer and seller share ownership, management or control. Three more use a conditional test that depends on which rate is lower or on whether the buyer already had an account.

Minnesota transfers the experience rating history only where there is 25 percent or more common ownership or substantially common management or control, and counts relatives such as a spouse, sibling or first cousin as common owners (Minn. Stat. 268.051, subd. 4). Every successor must still notify the agency within 30 calendar days.

Texas requires a transfer only with substantially common management, control or ownership (Tex. Lab. Code 204.083). Its joint application for unrelated parties covers part of a business, filed within one year (204.084). The statute does not provide an unrelated-party route for a whole business, so this registry codes Texas as not transferred, with confidence marked interpretation needed.

Delaware's contributions subchapter contains a transfer rule only for common ownership, management or control (19 Del. C. 3353); no general successor transfer was found, so Delaware is also coded not transferred with confidence interpretation needed.

The conditional group: Maine lets an unrelated buyer of a business in toto take the predecessor's rate or the state average rate, whichever is lower (26 M.R.S. 1221(5)). Maryland treats an unrelated buyer that had no account as a new employer, but combines the acquired payrolls and benefit charges into an existing employer's rate from the next January 1 (Md. Lab. and Empl. 8-613). Virginia transfers automatically but lets a new buyer opt out within 60 days (Va. Code 60.2-535).

What the inherited rate is worth: a median $1,044 per employee a year

The same transfer rule matters more in some states than others. The gap between a state's lowest and highest experience rate, multiplied by its taxable wage base, measures how far an inherited record can move the annual bill for each employee.

Formula: swing per employee = (maximum experience rate minus minimum experience rate) x taxable wage base. Inputs are DOL's July 2026 Significant Provisions, which exclude surtaxes and add-on taxes. Across 51 jurisdictions the median rate spread is 6.1 percentage points and the median swing is $1,044 per employee per year.

North Dakota has the widest swing at $4,474: rates run from 0.07 percent to 9.67 percent on a $46,600 wage base. North Dakota is also a state where the seller can veto the transfer. California has the narrowest swing at $329, because its $7,000 wage base caps the dollars at stake.

Against the new-employer rate, which a buyer gets when nothing transfers, inheriting a maximum-rated account costs a median $652 more per employee per year and inheriting a minimum-rated account saves a median $218, across the 44 jurisdictions with a fixed new-employer rate. For a 20-employee business at the median swing, the gap between best and worst inherited rate is $20,880 a year.

Buying part of a business usually takes both signatures

Partial acquisitions, such as one location or one division, rarely transfer automatically between unrelated parties. In 24 coded jurisdictions the buyer gets the matching share only on application, often joined by the seller.

Illinois requires a joint application filed within one year of the succession, or later if the rate determination is still open (820 ILCS 405/1507). North Carolina allows two years for a partial-transfer application approved by mutual consent (N.C. Gen. Stat. 96-11.7). Colorado requires that the segregable unit have 14 consecutive quarters of separate payroll records (Colo. Rev. Stat. 8-76-104).

Nine coded jurisdictions move a payroll-based share automatically, including New York, where the transferee takes over the account balance in proportion to payroll or employees (N.Y. Labor Law 581(4)), and Louisiana, Oregon and Washington. Five jurisdictions, including Vermont and Wyoming, provide no unrelated-party partial transfer in the text read.

Federal law forces a transfer only when the same people sit on both sides

The SUTA Dumping Prevention Act of 2004 (Public Law 108-295) added 42 U.S.C. 503(k). It sets two floors for every state and leaves the unrelated-buyer rule to state law.

Section 503(k)(1)(A) requires a transfer of experience when both employers are, at the time of transfer, under substantially common ownership, management or control. Section 503(k)(1)(B) bars a transfer to a person that was not otherwise an employer and acquired the business solely or primarily to obtain a lower rate (42 U.S.C. 503(k)).

States set the threshold for common ownership. New York uses at least 10 percent common ownership, management or control (Labor Law 581(7)); Minnesota uses 25 percent. DOL's 2023 Comparison describes the federal floors and notes that some states limit transfers to total acquisitions while others allow partial ones (DOL Comparison 2023, Chapter 2).

Eight states DOL called mandatory in 2001 no longer read that way

DOL last published a state-by-state transfer table in its 2001 Comparison (Table 203). Reading that table for the same 44 jurisdictions gives 33 mandatory total transfers; this registry codes 27.

Eight jurisdictions shown as mandatory in 2001 are coded differently now: Kansas, Tennessee and Wisconsin (optional on application), Minnesota and Texas (not transferred), and Maine, Maryland and Virginia (conditional). Rhode Island moved the other way, from optional in 2001 to mandatory in the current text. In all, 11 of 44 rows differ.

A difference can reflect a later amendment or a different reading of the same law. DOL's 2001 columns record whether transfers are mandatory or optional without separating related and unrelated buyers; this registry codes the unrelated-buyer case only.

Wage bases moved in 27 jurisdictions between January 2025 and July 2026

The dollars attached to any inherited rate depend on the taxable wage base, which changed in 27 jurisdictions over 18 months.

Washington's base rose from $72,800 to $78,200. Iowa's fell from $39,500 to $20,400, a 48.4 percent drop, and Oklahoma's fell from $28,200 to $25,000 (DOL Significant Provisions, January 2025 and July 2026).

Seven states where the official text could not be read

Alaska, Arkansas, Hawaii, Kentucky, Mississippi, New Mexico and Oklahoma are listed as not found rather than guessed. 15 coded rows carry the confidence flag interpretation needed.

• Not found: the statute host required scripts or a commercial service, and no agency page or archive copy with the rule could be opened. Each search is listed in excluded.md.
• Interpretation needed: the rule was coded from an agency form or rule rather than the statute (Alabama, California, Georgia, Indiana, Pennsylvania, Tennessee), from statutory silence (Delaware, Texas) or from wording that could be read more than one way (Colorado, Connecticut, Florida, Nebraska, New Hampshire, Rhode Island, Utah).
• New Hampshire could only be read in an Internet Archive copy from 2022; later amendments were not checked.

SUTA successor rules, 51 jurisdictions

Checked quarterly. Last checked 2026-10-31. Entries are neutral records of public data; each links to its source record.

State-by-state findings

1. 27 of 44 coded jurisdictions (61.4 percent) transfer a seller's unemployment experience automatically when an unrelated buyer acquires the whole business (registry, read 2026-10-31).^[8][33][47]
2. 11 of 44 coded jurisdictions transfer experience on a total acquisition only on application, including California (90 days), Idaho (180 days) and Kansas (120 days).^[9][16][20]
3. Minnesota transfers experience only with 25 percent or more common ownership or substantially common management or control (Minn. Stat. 268.051, subd. 4).^[26]
4. Texas requires a transfer only with substantially common management, control or ownership; its joint-application route covers an acquired part of a business (Tex. Lab. Code 204.083, 204.084).^[43]
5. Virginia assigns the predecessor's record automatically but lets a buyer that was not already a Virginia employer decline it within 60 days and take the new-employer rate (Va. Code 60.2-535).^[46]
6. North Dakota transfers experience only on request, and the seller can stop the transfer by filing a written protest within 15 days (N.D. Cent. Code 52-04-08).^[35]
7. The median swing between the minimum and maximum experience rate is $1,044 per employee per year across 51 jurisdictions at July 2026 wage bases (SMBB calculation from DOL data).^[4]
8. Inheriting a maximum-rated account instead of starting at the new-employer rate costs a median $652 more per employee per year in the 44 jurisdictions with a fixed new-employer rate.^[4]
9. Inheriting a minimum-rated account instead of the new-employer rate saves a median $218 per employee per year in the same 44 jurisdictions.^[4]
10. Among 17 coded states that state a deadline in days, the median is 90 days; North Carolina allows 730 days for a partial-transfer application and four states allow 30 days.^[34][26][25]
11. Iowa requires the seller to disclose its benefit-charge record to the buyer before signing a sale contract, and makes the seller liable for damages if it does not (Iowa Code 96.7).^[19]
12. Federal law (42 U.S.C. 503(k)) requires a transfer only where both employers are under substantially common ownership, management or control; the unrelated-buyer rule is left to each state.^[1]
13. Among the same 44 jurisdictions, DOL's 2001 Table 203 implies 33 mandatory total transfers; this registry codes 27.^[6]

Rankings and ratios we derived

Download the calculations (CSV)

Executive summary

• In 27 of the 44 jurisdictions coded from official text, a buyer that takes over a whole business also takes the seller's unemployment experience, whether or not the two are related.
• In 11 jurisdictions the transfer happens only if the buyer, and often the seller too, applies for it; Kansas allows 120 days and Montana 90 days.
• Minnesota, Texas and Delaware transfer experience only where the parties share ownership, management or control, so an unrelated buyer starts at the new-employer rate.
• Maine gives the unrelated buyer the lower of the inherited rate and the state average, Maryland treats a brand-new buyer as a new employer, and Virginia lets a new buyer decline the record within 60 days.
• The stakes: across 51 jurisdictions, the gap between the lowest and highest experience rate is worth a median $1,044 per employee per year at 2026 wage bases; for a 20-employee business that is $20,880.
• Partial sales usually need paperwork: in 24 coded jurisdictions a buyer of part of a business gets the matching share of experience only on application.
• Taxable wage bases changed in 27 jurisdictions between January 2025 and July 2026; Iowa's fell from $39,500 to $20,400.
• Seven states (Alaska, Arkansas, Hawaii, Kentucky, Mississippi, New Mexico, Oklahoma) are not coded because the official text could not be opened.

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Reproduce this analysis

Every figure comes from the files below. The scripts that pulled and computed them are kept with the report and can be re-run.

Data quality and exclusions

• 51 jurisdictions in scope; 7 removed from the coded set (AK, AR, HI, KY, MS, NM, OK) because no official text with the rule could be opened; each is listed in excluded.md.
• 17 of 44 coded rows were read through Internet Archive copies of official pages because the live site refused or timed out on scripted requests; capture dates are logged in raw/wayback_captures.log.
• 15 of 44 coded rows are flagged interpretation needed (agency form or rule instead of statute, statutory silence, or ambiguous wording).
• 2 DOL rows (Puerto Rico, Virgin Islands) dropped from rate tables as outside the 50 states plus DC.
• 7 jurisdictions with an industry-average new-employer rate were excluded from the new-employer comparison (d11, d12), leaving 44.
• 3 jurisdictions list two taxable wage bases in DOL's file (MI, NE, RI); the standard base was used.

Methodology

Question coded: for each of the 50 states and the District of Columbia, what happens to the seller's unemployment insurance experience when a buyer with no common ownership, management or control acquires (a) the whole business or substantially all assets and (b) part of it. Each row records the rule, any notice or application deadline in days, what transfers, the citation, the official URL, the date checked (2026-10-31) and a confidence flag (clear text, interpretation needed, not found).

Sources: the state's own statute on the legislature's site was preferred. Where that site blocked scripted access, an Internet Archive copy of the official page was used and labelled. Where no statute could be opened, an agency form, rule or guidance page was used and the row flagged interpretation needed. Law firm and payroll vendor summaries were read only as pages to compare against and were never used to code a row. Seven states with no openable official text are listed as not found rather than guessed.

The DOL Comparison of State UI Laws was the brief's starting point. The most recent edition DOL lists is 2023, and its Chapter 2 describes transfers in narrative form without a state table, so each state was coded from its own text. DOL's 2001 Table 203 was used only as a historical baseline, read for unrelated buyers using its footnotes 4, 8 and 9.

Rates and wage bases come from DOL's Significant Provisions of State UI Laws effective July 2026, parsed from the PDF with a script (scripts/parse_sigpros.py) and checked against the printed table. The January 2025 edition was used for the wage base comparison. Where DOL lists two wage bases (Michigan, Nebraska, Rhode Island), the standard base was used.

Derived metrics: swing per employee = (maximum rate minus minimum rate) x taxable wage base; downside and upside versus the new-employer rate use the same structure. Medians are taken across jurisdictions, not weighted by employment. All formulas and inputs are in derived_metrics.csv and the tables folder.

Conflicts: where a statute and an agency form differ in wording, the statute was coded and the form noted. Rows coded from statutory silence (Delaware, Texas) are flagged interpretation needed. This page is checked quarterly; last checked 2026-10-31. Owners comparing sale options can see how a broker-led sale is staged at how it works; broker matching is at find a broker.

This report presents published data with its limitations. It is not legal, financial or investment advice.

Sources, ranked by quality

Tier 1: primary and official sources (50)

• [1] U.S. Government Publishing Office (govinfo). 42 U.S.C. 503(k), Transfer of unemployment experience upon transfer of business (U.S. Code 2023 edition). U.S. Code 2023 edition. Accessed 2026-10-31.
• [2] U.S. Department of Labor, Employment and Training Administration. Comparison of State Unemployment Insurance Laws 2023, Chapter 2: Financing. 2023 edition (most recent edition listed). Accessed 2026-10-31.
• [3] U.S. Department of Labor, Employment and Training Administration. State Law Information (index of the most recent Comparison and Significant Provisions). Read 2026-10-31. Accessed 2026-10-31.
• [4] U.S. Department of Labor, Employment and Training Administration. Significant Provisions of State Unemployment Insurance Laws, effective July 2026. Laws effective July 1, 2026. Accessed 2026-10-31.
• [5] U.S. Department of Labor, Employment and Training Administration. Significant Provisions of State Unemployment Insurance Laws, effective January 2025. Laws effective January 2025. Accessed 2026-10-31.
• [6] U.S. Department of Labor, Employment and Training Administration. Comparison of State UI Laws 2001, Table 203: Transfer of Experience for Employer Rates, 52 States. 2001 edition (historical baseline). Accessed 2026-10-31.
• [7] Alabama Department of Workforce. Alabama Department of Workforce FAQ, 2023-11-16. Current text read 2026-10-31. Accessed 2026-10-31.
• [8] Arizona State Legislature. Ariz. Rev. Stat. 23-733. Current text read 2026-10-31. Accessed 2026-10-31.
• [9] California Employment Development Department. Cal. Unemp. Ins. Code 1051 to 1061 (per EDD form DE 4453). Current text read 2026-10-31. Accessed 2026-10-31.
• [10] Colorado General Assembly. Colo. Rev. Stat. 8-76-104 (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [11] Connecticut General Assembly. Conn. Gen. Stat. 31-225a(i)(2); 31-223b. Current text read 2026-10-31. Accessed 2026-10-31.
• [12] Delaware General Assembly. 19 Del. C. 3353, 3362. Current text read 2026-10-31. Accessed 2026-10-31.
• [13] Council of the District of Columbia. D.C. Code 51-103(c)(7). Current text read 2026-10-31. Accessed 2026-10-31.
• [14] Florida Legislature. Fla. Stat. 443.131(3)(g). Current text read 2026-10-31. Accessed 2026-10-31.
• [15] Georgia Secretary of State (Rules of the Department of Labor). Ga. Comp. R. and Regs. 300-2-3-.17, 300-2-3-.18 (implementing O.C.G.A. 34-8-153). Current text read 2026-10-31. Accessed 2026-10-31.
• [16] Idaho Legislature. Idaho Code 72-1351(5) (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [17] Illinois General Assembly. 820 ILCS 405/1507 (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [18] Indiana Department of Workforce Development. Ind. Code 22-4-10-6 and 22-4-7-2 (per Indiana DWD employer guide). Current text read 2026-10-31. Accessed 2026-10-31.
• [19] Iowa Legislature. Iowa Code 96.7(2)(b). Current text read 2026-10-31. Accessed 2026-10-31.
• [20] Kansas Office of Revisor of Statutes. Kan. Stat. Ann. 44-710a(b). Current text read 2026-10-31. Accessed 2026-10-31.
• [21] Louisiana State Legislature. La. Rev. Stat. 23:1539. Current text read 2026-10-31. Accessed 2026-10-31.
• [22] Maine Legislature. 26 M.R.S. 1221(5). Current text read 2026-10-31. Accessed 2026-10-31.
• [23] Maryland General Assembly. Md. Code, Lab. and Empl. 8-613. Current text read 2026-10-31. Accessed 2026-10-31.
• [24] Massachusetts General Court. Mass. Gen. Laws c. 151A, s. 14(n) (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [25] Michigan Legislature. Mich. Comp. Laws 421.22 (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [26] Minnesota Office of the Revisor of Statutes. Minn. Stat. 268.051, subd. 4. Current text read 2026-10-31. Accessed 2026-10-31.
• [27] Missouri Revisor of Statutes. Mo. Rev. Stat. 288.110. Current text read 2026-10-31. Accessed 2026-10-31.
• [28] Montana Legislature. Mont. Code Ann. 39-51-1219(2). Current text read 2026-10-31. Accessed 2026-10-31.
• [29] Nebraska Legislature. Neb. Rev. Stat. 48-654 (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [30] Nevada Legislature. Nev. Rev. Stat. 612.550 (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [31] New Hampshire General Court. N.H. Rev. Stat. 282-A:91, 282-A:93 (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [32] New Jersey Department of Labor and Workforce Development. N.J. Stat. 43:21-7(c)(7). Current text read 2026-10-31. Accessed 2026-10-31.
• [33] New York State Senate. N.Y. Labor Law 581(4), (7) (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [34] North Carolina General Assembly. N.C. Gen. Stat. 96-11.7 (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [35] North Dakota Legislative Branch. N.D. Cent. Code 52-04-08. Current text read 2026-10-31. Accessed 2026-10-31.
• [36] Ohio Legislative Service Commission. Ohio Rev. Code 4141.24(F)-(G) (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [37] Oregon State Legislature. Or. Rev. Stat. 657.480 (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [38] Pennsylvania Department of Labor and Industry. Pennsylvania UC Law (per Department of Labor and Industry form UC-15, rev. 09-23). Current text read 2026-10-31. Accessed 2026-10-31.
• [39] Rhode Island General Assembly. R.I. Gen. Laws 28-43-10, 28-43-35 (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [40] South Carolina Legislature. S.C. Code 41-31-100, 41-31-120. Current text read 2026-10-31. Accessed 2026-10-31.
• [41] South Dakota Legislature. S.D. Codified Laws 61-5-42, 61-5-46. Current text read 2026-10-31. Accessed 2026-10-31.
• [42] Tennessee Department of Labor and Workforce Development. Tenn. Code Ann. 50-7-403(b)(2) (quoted on agency form LB-0483, rev. 1/08) (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [43] Texas Legislature. Tex. Lab. Code 204.083, 204.084, 204.086 (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [44] Utah State Legislature. Utah Code 35A-4-303(8), 35A-4-304. Current text read 2026-10-31. Accessed 2026-10-31.
• [45] Vermont General Assembly. 21 V.S.A. 1325(b). Current text read 2026-10-31. Accessed 2026-10-31.
• [46] Virginia General Assembly (LIS). Va. Code 60.2-535. Current text read 2026-10-31. Accessed 2026-10-31.
• [47] Washington State Legislature. Rev. Code Wash. 50.29.062. Current text read 2026-10-31. Accessed 2026-10-31.
• [48] West Virginia Legislature. W. Va. Code 21A-5-10b (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [49] Wisconsin State Legislature. Wis. Stat. 108.16(8) (Internet Archive copy). Current text read 2026-10-31. Accessed 2026-10-31.
• [50] Wyoming Legislature. Wyo. Stat. 27-3-507. Current text read 2026-10-31. Accessed 2026-10-31.

Tier 3: journalism and expert commentary (2)

• [51] RSM US. Payroll and employment taxes are an often-overlooked M&A issue. Published 2015-04-07. Accessed 2026-10-31.
• [52] LegalClarity. Successor Employer Rules and PEO Wage Base Treatment. Published 2026-05-15. Accessed 2026-10-31.