State and Local Tax Insights -- Fall 2012


In This Issue:

State Tax Issues in Mergers, Acquisitions and Restructurings: Food for Thought; Upcoming 2012-2013 Speaking Engagements; The Due Process Clause as a Bar to State Tax Nexus; Paul H. Frankel, Craig B. Fields and Richard C. Call; Business Income in California and Legal Ruling 2012-01; “There you go again!”: Kentucky’s New Amnesty Program; and Recent California State Board of Equalization Legal Opinion Letter Could Create Confusion Regarding the Proposition 13 Change in Ownership Rules for Legal Entities.

Excerpt from State Tax Issues in Mergers, Acquisitions and Restructurings: Food for Thought:

Business mergers, acquisitions and restructurings involve legal, regulatory and tax components. Important among the tax components are various state tax issues that may include corporate income and franchise taxes, sales and use taxes (“sales tax”), as well as other taxes. In addition to considering taxes on the transactions, other state tax issues to be considered include potential liability for a seller’s unpaid taxes, changes to a company’s nexus and changes to reporting income. In this article, we highlight six state tax issues to consider: (1) tax bulk sales laws; (2) nexus; (3) instant unity; (4) state treatment of Internal Revenue Code (“I.R.C.”) Section 338(h)(10) transactions; (5) sales taxes; and (6) real estate transfer taxes. The foregoing six considerations are several, but not all, of the myriad state tax issues to consider when engaging in such transactions.

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