This section discusses the aspects of the law that specifically apply to liability for taxes.

Although the word ‘contributions’ is used throughout the Act, Commission Rules and this Manual, the courts have said that ‘contributions’ are in reality excise taxes. Since ‘taxes’ is a word universally understood by all employers, it is desirable that ‘taxes’ rather than ‘contributions’ be used in letters to and in conversations with employers.

As defined in Section 201.011, contribution means a tax payment under this subtitle to the compensation fund.

As provided in Section 204.002:

The language of this subsection indicates that every ‘employer’ is liable for payment of contributions or taxes.

Liability for payment of taxes is incurred on all wages paid by an employing unit when it is an ‘employer’ as defined in Chapter 201 Subchapter C.

The wording in Section 204.002 provides that:

Section 206.001 provides that:

Therefore, an employer is liable for taxes on any and all wages for employment, not specifically exempted, paid during any calendar quarter of such calendar year.

EXAMPLE: Mr. A opened a new business on January 1, 2000, and had some temporary employees. He continued business with only occasional employees until December 1, 2000, on which date he acquired the business and all assets of Mr. B, an employer. The employment Mr. A had up through December 1, 2000, was not qualifying under the Act, i.e., Mr. A did not have twenty weeks of employment nor a quarter with $1,500 in wages. Mr. A became an 'employer' under Section 201.022 on December 1, 2000; however, as provided in Section 204.002, Mr. A was an employer throughout 2000. He is liable to prepare reports and pay taxes for all four quarters of 2000. These reports must include wages paid for all four quarters of 2000 even though Mr. A did not qualify as an employer until December 1, 2000.

Section 204.086 provides that:

1. An individual or employing unit that acquires the organization, trade, or business or substantially all of the assets of an organization, trade, or business of an employer who, at the time of the acquisition, is indebted to the commission for a contribution, a penalty, or interest, is liable to the commission for prompt payment of the contribution, penalty, or interest.
   
   
2. If not paid, the commission may bring suit for the collection of a contribution, a penalty, or interest as though the contribution, penalty, or interest had been incurred by the successor employer.