IMPORTANT SALT CONSIDERATIONS IN M&A: ARE YOU EXPOSED FOR SALT? -

Right now, we are seeing a lot of deal activity. 2018 was the third busiest year ever for mergers and acquisitions (“M&A”), with more than $3.8 trillion in announced deals. While worldwide deal-making is down somewhat overall so far in 2019, deal volume is up 2% from the same period last year in North America, with approximately $470 billion of announced deals in the first quarter. While the deal market remains hot, the non-state and local tax (“SALT”) folks running the deals at your company may not be aware of the various potential SALT issues that need to be considered. It is critical that they be made aware of the importance of involving SALT people early and often. With that in mind, we review some often overlooked but important SALT considerations that need to be addressed when your company is buying, selling or restructuring.

SUCCESSOR LIABILITY -

When the stock of a corporation is acquired, the corporation will generally continue to be liable for its previously existing tax liabilities. Therefore, stock-deal buyers generally ensure that appropriate language is included in the purchase agreement to protect against buying unknown or concealed liabilities. The unwise think asset deals leave them with no worries.