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INCOME AND SALES TAX NEXUS
States are strapped for revenues. According to the Tax Foundation, on average, states lost about $59,000,000,000 of their total revenues in 2020 and many states have pledged to aggressively pursue income and sales tax nexus as a way to makeup those lost revenues. Businesses have to ensure that they understand their nexus causing activities.
Businesses who have either income or sales tax nexus and fail to act face tax liabilities, penalties, and even criminal charges. The sales tax, and in some jurisdictions the income tax, is based on revenues, so even if you have a loss, you are still liable for these taxes.
Our principal has seen first-hand how devastating getting sales tax wrong can be- a firm he worked for was closed by the New Mexico Taxation and Revenue Department for failing to file and remit sales taxes; the firm was forced to close and layoff its 10-person staff and forced the owner into bankruptcy.
MERGERS & ACQUISITIONS
Mergers & Acquisitions have many tax aspects.
If you are acquiring another company, you want the best tax benefits for your company- whether that is amortizing intangible assets and depreciating tangible assets or using options and warrants as a tax benefit for the acquisition.
You also want to make sure that when you acquire another company, you don't acquire outstanding or unknown tax liabilities. Our firm can help you analyze your target and ensure that you receive tax clearance letters to ensure you have piece of mind in your acquisition.
If you are selling your business, you want to maximize your tax benefits- whether that's reinvesting your capital gains, analyzing your taxable basis or structuring the transaction in a way that creates a non-taxable event, we can help you defer and avoid taxes.
WARRANTS, OPTIONS, AND FRINGE BENEFITS
Compensation is important to attract the best talent. Sometimes, compensation comes down to salary, but it doesn't have to. Salaries are taxable income, but some types of compensation can be tax deferred or tax free. Many companies know about 401(k) plans and insurance benefits, but know less about warrants, options, and other fringe benefits such as educational assistance and student loan repayment assistance which can be tax free to the talent you are trying to attract.
For example, a $5,250 tax-free student loan repayment benefit is actually worth over $6,500 based on a 25% effective tax rate. Let us help you attract and retain the best talent.