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:
- Sales and use tax. When you’re faced with a sales and use tax audit, we’ll gain a deep understanding of your business transactions and apply the rules and regulations of each jurisdiction to your specific scenario. The objective is to reduce taxes, interest and penalties for the audit period and going forward. We’ll work with your team to develop best practices that will move you into compliance, minimize tax and recover overpayments.
- Nexus study. This study will identify states and jurisdictions where your company has nexus, which is a physical or economic presence that allows a taxing entity to subject your company to income or sales tax. We’ll help you comply with these jurisdictions and avoid nexus in others, as warranted. We also assist with audit defense and guide you through voluntary disclosure programs to mitigate taxes, interest and penalties.
- 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. We can help you structure business transactions strategically to reduce or increase apportionment factors to lower taxes.
- Voluntary Disclosure Agreements (VDAs). When you have potential exposure in a jurisdiction, we’ll guide you through any applicable VDA programs. This requires voluntary disclosure of past tax liabilities and filing of required documentation to minimize the lookback period, interest and penalties.
- Property Tax. Real and tangible property tax comprises a significant portion of many businesses’ state and local tax liability. We will review your assets, assist you in establishing the appropriate value of each and advise you about strategies to pay the correct amount of property tax.
- Charitable Solicitation Registration. To protect their citizens, states want to know about the nonprofits that are soliciting donations in their state. Most states require a nonprofit to register with a state agency before they solicit donations in their state. Meeting the definition of “charitable solicitation” is a very low bar, and is easy to cross. States are moving towards increased regulation. Agencies now have CPAs and attorneys on staff full-time to audit, investigate, and prosecute violations of charitable solicitation laws.
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.