Minimizing the Impact of State and Local Taxes
Today, lack of a physical presence is no longer a predictor of whether your company is subject to taxation in a state. With traditional revenue sources dwindling, states and municipalities aggressively seek to tax interstate commerce, often pushing the boundaries of nexus and minimum contact standards.
State revenue laws are just beginning to catch up with technological innovation, and the trend toward state taxation of ecommerce will change the playing field for many growing Internet-based businesses and software resellers.
Managing the impact of inconsistent state and local tax laws can be overwhelming. The applicability of traditional state tax laws to new business models-such as software-as-a-service (SaaS) and cloud computing-is not cut-and-dried. This evolving area of the law is creating uncertainty on all sides regarding what is and is not taxable.
On the bright side, complexity creates opportunity. Many states, including Georgia, offer potentially lucrative transferrable state tax credits, which allow businesses and individuals to pay state taxes with discounted dollars. Companies looking to expand or move into a new state also may be able to negotiate favorable terms that can lessen or eliminate the costs of relocating. State and county governments, eager to create job opportunities for their constituents, often seek to invest in long-term relationships with prospective new employers by offering grants, tax credits, incremental financing and other incentive packages.
Bennett Thrasher’s state and local tax specialists position our clients to take advantage of available opportunities while simplifying tax compliance by:
- Identifying current multi-state tax exposure in all 50 states, the District of Columbia and Puerto Rico
- Reducing effective state tax rates through planning and restructuring, buying and selling state tax credits, and proactively identifying refunds and exemptions
- Mitigating prior period tax exposure through negotiations with state departments of revenue
- Negotiating economic incentive packages associated with business expansions and relocations
- Outsourcing and managing state tax reporting and quantifying state income tax reporting positions for FIN 48 purposes
- Resolving state and local tax controversies, from administrative appeals to audits
Our state and local tax experts specialize in this rapidly changing area of taxation, and we work closely with economic development authorities to shape legislation, regulations and administrative policies that affect our clients.
If you are looking to mitigate your risks in this increasingly uncertain tax environment, contact our state and local tax consulting leader, Peter Stathopoulos or call 770.396.2200 to schedule a confidential consultation.