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Read about a notable M&A case where a buyer’s argument for substance over form led to a $3 million amortization income tax deduction. Learn how the court’s decision highlighted the importance of aligning transaction structure with economic substance.   M&A

Posted in amortization, form over substance, substance over form, Taxation Tagged with: , , , , , , , , , ,

How a Chosen Merger Structure Led to a $2 Million Tax Impact for the Seller

Explore a case study where a business owner’s merger decision resulted in a substantial tax impact of over $2 million. Learn how the chosen deal structure influenced tax outcomes and the implications for buyers and sellers. Seek expert tax advice

Posted in boot, cash, form over substance, merger, substance over form, tax deferred reorganization Tagged with: , , , , , , , , , , , , , ,

$2.8 Million Tax Consequences Arising from Incorrect Subsidiary Sale Structure

July 6, 2020 Explore a case study highlighting the significant tax implications resulting from an incorrect subsidiary sale structure in a business acquisition. Learn from the legal dispute and its aftermath, emphasizing the importance of accurate acquisition documents and coordination

Posted in mutual mistake, structure of transaction, Taxation Tagged with: , , , , , , , , , , , , , , , ,

Use of independent sales representatives subject out of state company to WA gross receipts tax

Today I want to talk about how your company may have more exposure to states in your market that have a gross receipts tax as opposed to an income tax. Let’s say you are a company that makes goods in

Posted in Taxation

Sale of servers and related computer equipment in divestiture of IT division is an occasional sale under NC sales tax law

Today I want to talk about the sales tax cost of selling or buying the assets of a business.  The buyer and seller of a business often argue over who will pay any sales tax on the tangible personal property,

Posted in Taxation

IL explains its sales and use taxation of a fee for providing a MLM mobile application program to its distributors

Today I want to talk about a multi-level marketing company (“MLM”) that sells its nutritional and diet products through its independent distributors. The MLM charges its distributors a fee to use its mobile application program. The MLM is not based

Posted in Taxation

Sales income earned from product shipped from Indiana to other states thrown back to Indiana

Today I want to talk about how sales income from product shipped out of state can be taxed by the state from which the product was shipped. People in the trade call this the throwback rule. An example of the

Posted in Taxation

South Carolina wants Amazon to collect use tax on sales made on its platform by 3rd party sellers to South Carolina residents

Today I want to talk about selling through Amazon’s Fulfillment by Amazon (“FBA”) program. Let’s say your Arizona based company sells books on Amazon through the FBA program. For a FBA fee, your books are stored by Amazon. Amazon’s website

Posted in Taxation

Profit from sale of joint venture interest apportioned along with company’s other multistate net income

Today I want to talk about a multistate business that grows by joint venturing with another business. Specifically, let’s look at when the company exits from the joint venture with a sizable profit. Most states would tax the profit (or

Posted in Taxation

Colorado exercises discretion and excludes gain from sale of LLC interest of Colorado headquartered company from Colorado sales factor

Today I want to give a state taxing agency credit for doing the right thing. In this case the honors go to the Colorado Department of Revenue. This story involves a manufacturing company. It had a Colorado headquarters and two

Posted in Taxation

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