State and Local Taxation

More than ever, states and local governments are looking for creative ways to raise revenues. Licenses taxes, gross receipts taxes, business activity taxes are the new taxes on the increase. Moreover, nexus or “doing business” standards are now more broadly defined today to capture businesses with no physical contact but for a certain level of sales to justify registration and filing of tax returns. You need a tax advisory firm with a robust state and local expertise. Sales tax, property tax, excise tax, state income tax compliance is burdensome for medium and middle market businesses without a full inhouse tax department. Hall & Company provides tax compliance services as well as planning strategies to mitigate these tax burdens.

We look for tax savings in your business. Whether you are expanding your market territory or entering into an acquisition, having a state audit examination, selling abroad or remotely. We can help.

Helping You to Proactively Plan

We can help you proactively plan for and address your state and local tax responsibilities throughout your business life cycle. Our goal is to help you not just stay in compliance and reduce your tax burden but also to look for key financial opportunities in the process.

State & Local Tax Mitigation Strategies

Due to differences in tax systems among the states, legal entity structure can have a profound impact on state tax liabilities and the bottom line. Few corporate organizations evolve naturally into a legal structure that is the most efficient from a state tax standpoint. Opportunities may exist to lower the effective state tax rate and improve cash flow through the use of special purpose entities. We implement a legal entity structure that minimizes the company’s state and local tax burden while being compatible with business operations.

Who

  • All industries: manufacturers, distributors, wholesalers.
  • Applies to clients filing in two or more states as a S or C corporation.
  • When

  • Post filing review or in preparation for compliance filing.
  • Audit Defense and Appeals

    Income and sales tax audit defense/appeals is highly specialized and labor intensive. We can provide on-the-ground state-specific expertise for every state audit. Our tax professionals are
    former state auditors, attorneys and CPAs with audit and controversy experience. We can manage the audit from the initial contact letter, perform a pre-audit, consult on specific audit
    issues and positions, or strategically review the closing / audit findings.

    Who

  • All industries.
  • When

  • Upon notice of impending audit.
  • State Nexus Review

    Our nexus process provides clients with a “snapshot” of how their multistate operations affect a state’s “doing business” standards. We analyze a client’s corporate activities within each state for nexus. We then estimate income and sales tax liability associated with the company’s activities. Our qualitative and quantitative approach provides a road map to resolve or mitigate tax issues. With client input we formulate a practical plan to eliminate or mitigate any identified tax exposures.

    Who

  • Rapidly growing companies; high technology companies and service enterprises including software developers; internet sellers
  • When

  • Upon receipt of a nexus questionnaire or other state correspondence.
  • Companies with growing sales in multiple states.
  • Voluntary Disclosure Agreement

    Regularly companies inadvertently do not file income tax and sales/use tax returns in states where returns are required. The voluntary disclosure process allows our clients to obtain a resolution that is acceptable to both the client and state authorities. The agreement can cover all types of taxes, including sales, use, income and franchise, in the same single negotiation.

    Who

  • Companies who knowingly acknowledge that they have a filing and collection responsibility.
  • Any taxpayer who desires piece of mind.
  • When

  • Before the State makes first contact.
  • State Income /Franchise Tax Return Review

    Our state and local tax professionals look at the client’s entire organization to create an overall strategic tax approach that makes sense from an operations perspective. We begin by reviewing the client’s income tax returns filed in the previous 3 years. We look for available credits, filing positions and prospective tax planning ideas for apportionable and allocable income. Our findings typically lead to future tax savings and sometimes a refund of tax.

    Who

  • Companies with a state tax effective rate of 5% or more.
  • Companies with international and/or multistate operations.
  • Companies that file on a federal consolidated basis.
  • When

  • Anytime, but especially after a business acquisition.
  • Reverse Sales & Use Tax Audit

    A reverse sales and use tax audit is a comprehensive review and analysis of a company’s transactions. Through this review, we identify exempt transactions upon which the client may have inadvertently paid sales or use tax. The analysis is also helpful in identifying areas of underpayments. We also work with company personnel to implement procedures on a go-forward basis, and look for sales/use tax planning ideas that lead to an increase in cash flow and reduction of sales/use tax cost.

    Who

  • Applies to manufacturing, high tech/growth and government sector industries.
  • Applies to companies who purchase large amounts of property for their own use in manufacturing, shipping, hospitality & service enterprises.
  • Applies to any company previously audited or currently slated to undergo a sales/use tax audit.
  • When

  • Anytime, but especially upon notice of impending audit or when cash flow is restricted.
  • Transaction Support—Due Diligence and M&A Planning

    Undiscovered material state income and sales tax liabilities can surprise the purchaser after the deal has closed – and that’s too late. Even an asset purchase does not protect the buyer from acquiring the seller’s sales/use, income/franchise, and gross receipts tax liabilities. Quantifying these liabilities before the ink has dried is critical. In addition, the purchaser may acquire carryforward credits or losses that the seller did not value and may have valuable state-specific election opportunities available. Regardless of which side of the transaction your company is on, we can help identify "pitfalls" as well as uncover "hidden gems".

    Who

  • Companies contemplating the acquisition or disposition of a business or business segment.
  • When

  • Early in the acquisition or disposition process.
  • Multistate Credits & Incentives Benefit Analysis

    Our Credits and Incentives practice specializes in identifying, documenting and securing retroactive and prospective state tax credits and incentives. Our C&I professionals are able to identify statutory and negotiated benefits for clients in all industries. Our professionals then work to document and secure these hiring credits and sales tax credits for our clients.

    Who

  • Applies to companies located within designated economic development zones and/or companies that are manufacturing, processing or biotechnology enterprises.
  • When

  • Whenever a company has made an acquisition, relocated, or is contemplating expansion.
  • Cost Segregation

    An often-overlooked tax-savings opportunity is accelerated depreciation of costs associated with the construction, renovation or purchase of a new building or real estate. By identifying assets that qualify for shorter depreciable lives, companies are able to accelerate tax depreciation and lower current income tax. Our team of dedicated cost segregation consultants helps ensure our clients maximize their investments.

    Who

  • Applies to companies with recent real property acquisition or build outs of $1.5 million in construction costs.
  • Applies to real estate development, hospitality, high tech/growth, and manufacturing.
  • When

  • Whenever a company is planning to construct a facility or renovate an existing facility.
  • Property Tax Services

    In the current economic climate, our clients may be overpaying on real and personal property taxes due to inflated valuations. Typically, the period for challenging property valuations is limited. In addition, negotiating with local tax authorities can be difficult unless company personnel handling property taxes are located in the taxing jurisdiction. Our property tax professionals help clients reduce property taxes by 1) identifying and confirming their property tax listing, 2) providing valuation support and 3) negotiating with local taxing authorities.

    Who

  • Applies to companies that our own real property valued at $3 million and or personal property of $5 million.
  • Applies to companies who have acquired new property in the last 3 years.
  • Applies to golf courses, hospitality, heavy construction and manufacturing.
  • When

  • Before the assessment appeals deadline, upon notice of impending audit, or upon a business acquisition or disposition.
  • Michael P Nunez Senior Tax Manager

    Michael Nunez

    Senior Tax Manager P: 949-910-4255 ext. 277 E: mn@hallcpas.com

    Tony Bui

    Senior Tax Manager P: 949-910-4255 E: tb@hallcpas.com

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