Seeking Ways to Minimize Your State and Local Taxes
You sell your product or service to people who need it. Often not giving any thought to where they are located and what that means to your business. Until one day when you open the mail to find a letter saying that you owe taxes to a specific taxing authority—taxes that you didn’t know you owed to a jurisdiction where you don’t even have a physical presence.
The competition among states for revenue is fierce, and the rules vary state-to-state. States and municipalities are constantly changing tax rules, too, as they move from a physical presence standard to an economic presence standard to capture tax revenues from out-of-state businesses. We can work with you to proactively plan for and minimize taxes in the following areas:
- Multi-state Economic Nexus for Sales Tax Advisory Services – As a result of South Dakota v. Wayfair, out-of-state sellers who meet economic presence thresholds (typically $100,000 in sales into a state) are required to register, collect and remit sales tax, as of each state’s economic nexus effective date. Many states enacted economic nexus legislation effective as of October 2018. Remote sellers who have not been charging sales tax are responsible for the unpaid sales tax liability in every state in which they have exceeded the economic nexus sales thresholds.
Barnes Dennig provides multi-state advisory services on the taxability personal property, services, and intangible items, such as licenses. Our team can assist you with the identification of taxable sales by state, quantifying sales tax liabilities and exposure, and assist with voluntary disclosure programs or penalty abatement. Our advisory services include assistance with moving into compliance with states, state registration and prior sales tax return preparation.
- Sales Tax Transaction Advisory / Reverse Sales Tax Audits – Barnes Dennig provides advisory services to businesses to assist them in identifying transactions that may be sales tax exempt and could result in refund potential, and in identifying sales tax exposure for taxable sales and purchases where sales/use tax was not properly charged. Our team will perform a detailed review of business transactions to determine if sales/use tax was properly charged, assist your business with developing sales tax best practices, address tax exposure issues, and lead refund claims.
- Sales and Use Tax Due Diligence for Mergers and Acquisitions – Almost all states and hundreds of political subdivisions impose sales and use taxes on virtually every transfer or use of tangible personal property unless a specific exclusion or exemption applies. Sales tax implications are often overlooked in the context of business mergers, acquisitions, dispositions, liquidations and other transfers, including inter-company transfers of assets, and can lead to unexpected liabilities. Performing sales tax due diligence before M&A activity can uncover tax deficiencies and assist you in reducing sales tax liabilities that could have negative consequences on the sale of your business.
- Apportionment study – Apportionment divides a multi-state company’s income among jurisdictions with which they have sufficient nexus. Many states have adjusted their apportionment formula to attract business investment and raise revenue. Barnes Dennig assists companies in structuring business transactions strategically to reduce or increase apportionment factors to lower taxes.
- Not-for-Profit Charitable Solicitation Registration – Barnes Dennig can assist non-profits avoid fines, penalties and loosing grant money due to not being registered. To protect their citizens, states want to know about the non-profits that are soliciting donations in their state. Most states require a nonprofit registration with a state agency before they solicit donation in their state. Meeting the definition of “charitable solicitation” is simple, even including Board members asking friends and family to donate and a “Donate Here” button on a nonprofits website. States are moving towards increased regulation leading to consequences ranging from fines and penalties to loss of tax exemption. States have varying forms and processes to register and Barnes Dennig can assist through these unique proceedings.
- Other Services
- Voluntary Disclosure Agreements
- Property Tax
- Sales Tax Registration and filing prior returns
State & Local Tax Experience: Our SALT professionals have the technical expertise to advise your business on state-by-state income, franchise and sales tax regulations. We specialize in identifying and assisting businesses in qualifying for multi-state state tax credits, incentives and refunds.
Understand where you have nexus and how that impacts your overall tax liability. Contact us for help navigating the numerous state and local tax regulations.