Sale or Purchase of a Business
If you are considering selling or purchasing a business, there are various state and local tax considerations that need to be addressed regarding the structure of the transaction. While many states do not tax stock transfers for sales and use tax purposes, there are likely income/franchise tax consequences that need to be evaluated.
If you are planning to just purchase the assets of an existing business, there can be sales and use tax due on the taxable assets being transferred. In addition, many states impose notification requirements, whereby a party to the transaction may need to contact the state about the pending transaction and potentially set aside a portion of the sale/purchase price to account for tax liabilities. Failing to adhere to these guidelines may result in purchaser being liable for any tax due that the seller may have owed.
There may also be other state and local taxes due on transfers of property such as real estate that need to be considered. Our SALT team works in conjunction with our Transaction Advisory Team to plan and execute the most tax-effective transaction and structure for your business.
See our “Transaction Lifecycle” diagram below to learn about the state and local tax issues we consider related to structuring a transaction.
Are you or your business planning to purchase a high-dollar asset such as an aircraft, a yacht or artwork? Transactions of this nature often result in tens of thousands of dollars or more in sales or use tax or other state and local taxes being owed. However, careful planning and some research beforehand may save you a considerable portion of these sales tax dollars.
Our SALT team has considerable experience providing transaction planning services for our clients in connection with high-dollar purchases and can assist you with managing the state and local taxes related to your purchase.