Description
Mergers and Acquisitions: Sales and Use Tax Consequences
discusses the principal sales and use tax concepts that should be addressed—but are often overlooked—in structuring a merger or acquisition. Written by James P. Kleier, Esq., Reed Smith, this Portfolio begins with an introduction to general sales and use tax and discusses the concepts that will impact most of these transactions, such as the dividing line between tangible and intangible property and exemptions: the “casual sales” exemption, the “sales for resale” exemption, and other state-specific exemptions.
Mergers and Acquisitions: Sales and Use Tax Consequences
concentrates on generally applicable principles with a particular focus on the laws of some of the larger states. In addition, it examines the state tax provisions applicable to other common corporate transactions. These transactions covered include:
- Liquidations,
- Incorporations,
- Bulk sales and successor liability,
- Intercompany accounts, and
- Transfers to newly formed corporations under Internal Revenue Code Section 351.
Worksheets include an Exchange of Information Agreement (Sales and Use Tax), proposed by the Multistate Tax Commission, and a Multistate Tax Compact.
Mergers and Acquisitions: Sales and Use Tax Consequences
allows you to benefit from:
- Hundreds of hours of original research on specific tax planning topics from leading practitioners in this area.
- Invaluable practice documents including tables, charts and lists.
- Plain-English guidance from world-class experts.
- Real-world and in-depth analysis that lets you explore various options.
- Time-saving access to relevant sections of tax laws, regulations, court cases, IRS documents and more.
- Alternative approaches to both common and unique tax scenarios.
This Portfolio is part of the Premier State Tax Library, a comprehensive series, which covers major state tax transactions and issues with expert, in-depth analysis, and offers commentary on a wide range of multi-state and state-specific taxation topics, including Sales and Use, Corporate Income, Individual Income, Property, Gross Receipts, Limitations on States' Authorities to Tax, Credits and Incentives, Electronic Commerce, Mergers and Acquisitions, Procedure and Administration, Special Industries, and more.
Table of Contents
Detailed Analysis
1530.01. INTRODUCTION
A. Overview
B. Underdeveloped State of Law
C. Topics Covered by Portfolio
1530.02. GENERAL SALES AND USE TAX CONCEPTS
Introductory Material
A. Definitions
1. Sale
2. Lease
3. At Retail
4. Storage, Use, or Other Consumption by Purchaser
5. Tangible Personal Property
a. Distinguished from Real Property
b. Distinguished from Intangibles
c. Distinguished from Services
6. Other Property
7. In the State
B. Seller's Permit
C. Series of Sales
D. Sales for Resale
1530.03. SALE OF ASSETS
Introductory Material
A. Occasional Sale Exemptions
1. California
2. Georgia
3. Illinois
4. New York
5. Texas
6. Other States
B. Sale for Resale Exemption
C. Manufacturing Machinery and Equipment Exemption
D. Bulk Sales and Successor Liability
1. Bulk Sale Notification
a. Illinois
b. Maryland
c. Massachusetts
d. New York
2. Withholding
a. California
b. Connecticut
c. Florida
d. Kentucky
e. Texas
3. Personal Liability of Corporate Officers
E. Intercompany Accounts
F. Allocation of Purchase Price
1530.04. TRANSFERS UNDER INTERNAL REVENUE CODE SECTION 351
Introductory Material
A. Transfers to Newly Formed Corporations
1. California
2. New York, New Jersey, and Vermont
3. Maryland
4. Other States
B. Transfers Including Debt Assumption and Other Consideration
1530.05. DROP-KICKS: DROP-DOWN OF ASSETS FOLLOWED BY STOCK SALE
Introductory Material
A. Exemption for Drop-Down
B. Step Transaction Doctrine
C. Successor Liability
1530.06. MERGERS AND REORGANIZATIONS
Introductory Material
A. Statutory Merger or Consolidation
B. Stock for Stock Acquisitions
C. Stock for Asset Acquisitions
D. Corporate Split-Ups
E. Recapitalizations
F. Changes in Form or Identity
1530.07. LIQUIDATIONS
Working Papers
Item Description Sheet
Worksheet 1 Exchange of Information Agreement (Sales and Use Tax) (proposed by the Multistate Tax Commission)
Worksheet 2 Multistate Tax Compact
Worksheet 3 [Reserved]
Sales and Use Tax Aspects of Acquisitions, Mergers, and Divestitures
Bibliography
Bibliography
Authors
James Kleier
Mr. Kleier is a graduate of Thomas More College (B.A. 1976) and the University of Kentucky College of Law (J.D. 1979). He was Survey and Comments Editor of the Kentucky Law Journal and a member of the Order of the Coif.Mr. Kleier is active in local and national bar activities. He was previously the American Bar Association Section of Taxation's Chair of the Special Project Task Force of the Administrative Practice Committee and is also past Chair of the San Francisco Bar Association's Barristers Club Tax Section. He has taught California State Taxation at Golden Gate University and is a regular lecturer on criminal tax at the University of California's Hasting College of the Law. He has written and lectured extensively on state and local taxation and on federal tax controversies, including “Sales and Use Tax Consequences of Mergers and Acquisitions” for the center for State and Local Taxation at the University of California (Davis). “Prospectivity of Decisions Invalidating State Tax Laws” for the Federation of Tax Administrators, “State Tax Procedural Tips and Traps” for the Committee On State Taxation, “Current State Tax Issues” for the Continental Association of Certified Public Accountants, and “Sales and Use Tax Exemptions” (with James B. Ellis) for the Matthew Bender treatise California Taxation. He has also written articles on tax indemnity clauses and purchase price allocations for Taxation for Lawyers, and has written articles on various aspects of state taxation for Interstate Tax Insights and International Tax Review.Mr. Kleier specializes in tax litigation and the administrative resolution of tax controversies in the United States Supreme Court, the United States Tax Court, and other federal and California courts, as well as handling controversies at the administrative level before the Internal Revenue Service, in California, and in nearly a dozen others states. He represented Colgate–Palmolive Co. in its constitutional challenge to worldwide combined reporting in the United States Supreme Court.