When an organization is considering a merger or acquisition, there are often many state and local tax issues that may provide significant tax planning opportunities. We often assist the buyer or controlling party to assess the state and local tax exposure of the targeted entity and assist in the resolution of any issues discovered, typically saving the buyer time and money before the transaction is consummated.

The state and local tax compliance landscape may change significantly once the deal is complete. This is a good time for us to help you assess what the tax posture of the combined business will look like, and what internal staff and process changes make sense. The functions that typically change significantly are property taxes, sales & use, and unemployment taxes.

Businesses that have already been involved in mergers and/or acquisitions may be entitled to refunds, credits, or other preferential tax treatment as a result of the transaction. In some cases, these amounts are substantial. We often find that clients strongly believe that all the bases were covered, or “our accountants, attorneys, payroll processor….already took care of that”. In reality, some or all of the refunds or credits have probably either been completely missed or not fully realized.

In some cases, the additional compliance burden provides a good opportunity to attain process improvements or outsource some or all of these functions. It makes little sense to grow a large specialized internal tax department that will only serve one client. Our clients prefer to focus on growing operations, while outsourcing/cosourcing key functions to achieve economies of scale.