SALT Due Diligence for Business Sales and Purchases: Determining Economic Nexus and Unforeseen Liability

Recording of a 110-minute CPE webinar with Q&A


Conducted on Wednesday, September 1, 2021

Recorded event now available

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Course Materials

This course will discuss performing due diligence for state and local tax obligations for business purchases and sales. Our panel of income tax veterans will explain determining filing obligations in specific states, identifying unusual or unexpected state taxes, and how to protect both parties from unanticipated future liability.

Description

Identifying tax risks when acquiring a business is particularly important. Each state is different, and states have a wide array of taxes that a business may owe, including income, franchise, sales and use, and gross receipts taxes. Additionally, there could be local or jurisdictional obligations as well.

Purchasing a business' assets, as opposed to stock, does not alleviate the buyer's obligations if the seller was not compliant with SALT rules. California, like most states, offers an occasional sales exemption from sales tax. However, unlike most states, this exemption does not apply to the sale of business assets, triggering significant, often unexpected, sales tax liability.

Sales and use taxes and employee withholding are trust fund taxes. Most states allow collecting these withheld taxes from the company, its owners, officers, and any successor entity or assets. Tax advisers working with businesses need to be aware of potential state tax issues that could arise when buying or selling a business.

Listen as our panel of SALT experts explains how to identify and analyze state and local tax risks associated with acquiring or selling a business.

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Outline

  1. SALT due diligence: an overview
  2. Financial statements
  3. Nonfilings
  4. Economic nexus
  5. Audits and refund claims
  6. Specific taxes
  7. Other inquiries
  8. Recent cases

Benefits

The panel will review these and other critical issues:

  • Analyzing nexus and potential state income tax obligations in states for business purchases
  • Determining whether sales and use tax obligations are current
  • Avoiding exposure for unanticipated state and local tax filing and reporting obligations
  • Determining how asset vs. stock sales may affect SALT obligations in specific states
  • Handling nonfilings for potential business acquisitions

Faculty

Ortiz, James
James A. Ortiz

Principal, State and Local Tax
REDW

Mr. Ortiz concentrates on the State & Local Tax field, specializing in sales and use tax, and multistate income...  |  Read More

Rendziperis, George
George W. Rendziperis

Principal, SALT
REDW

Mr. Rendziperis represents taxpayers in matters involving state income, franchise, gross receipts, sales and use,...  |  Read More

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