News & Information

CCH® UNEMPLOYMENT INSURANCE — 09/13/17

Texas court finds successor employer improperly refused tax refund; no common management or control with predecessor

A successor employer was improperly refused a refund of taxes it had paid under protest. On review, the court reversed the summary judgment that had been entered in favor of the Texas Workforce Commission and entered judgment for the successor. The evidence established that the transition activities undertaken by the predecessor's officer were limited to assisting the successor as the successor began to provide services to the acquired client accounts. There was no evidence that the predecessor had retained, or that the successor had ceded, any independent control or decision-making authority once the accounts were acquired. As a result, assuming without deciding that the transition-assistance activities were properly attributable to the predecessor, the court concluded that there was no evidence in the summary-judgment record suggesting that the predecessor "continue[d] to . . . manage the assets," as that term is used in the relevant statutory provision. Thus, there was no evidence to support the conclusion that there was "substantially common management or control" between the successor and predecessor following the acquisition of the assets (G&A Outsourcing IV, LLC v. TWC, Tex. Ct. of App., Third District, Austin; No. 03-16-00752-CV, August 17, 2017).