Merging with or acquiring another organization is an exciting opportunity, but it can come with many tax implications.
It is important to analyze the business profiles of each company beforehand to ensure that the deal is sound and will not impact your business negatively. Thompson Tax will complete a thorough analysis of each business, analyze in-process audits, and review proposed consolidations to identify potential liabilities.
Making an informed decision while considering a merger or acquisition is paramount, and Thompson Tax can give you peace of mind knowing that you are making a good one.
Let us be your trusted Tax Advisors
When you trust Thompson Tax to help with your merger or acquisition, you can expect the following:
- A complete due diligence review of State and Local Tax (SALT) issues
- Taxability analysis of sales, purchases, and self-consumables
- Reviewal of proposed business consolidation to determine liabilities and recommend ways to reduce penalties
- Sales tax nexus analysis to determine your multistate tax liability
- Quantification of sales and use tax exposure and discussions regarding issues relevant to contingency reserves (ASC450)
- Analysis of any in-process audits
- Determination of prospective assessments
Mergers and Acquisitions FAQs
What should I know about starting the M&A due diligence process?
The first step is to ‘know the deal.’ It is important to review the Buy/Sell Agreement to determine the type of entities involved and the type of deal being negotiated (Stock, Asset, etc.). This will ensure that all parties are aware of successor and predecessor liabilities (which may include specific notations, closeout documents and close out audits). It is also important to know what ERP systems are in use so that you can determine whether a transition to a new system will be needed after the transaction is complete.
How can Thompson Tax help with my M&A deal?
We understand the importance of the details surrounding mergers and acquisitions. We have a two part process that starts with ‘knowing the deal’ and concludes with a sales and use tax risk analysis and a review of other tax considerations. During Phase II of the due diligence process we will address the following:
- State and Local Tax Nexus; Physical Presence & Economic Nexus Post-Wayfair along with your Marketplace position.
- Taxability of your Products and Services along with a review of resale and exemption certificates
- Current filing calendar including data reports and historic returns.
- History of prior audits and notifications to include as well as Private Letter Rulings (PLRs) and Working Papers
- Location of your returns and files
What does SALT include?
State and Local Tax (SALT) encompasses a number of components, including:
- Income tax
- Franchise tax
- Gross receipts tax
- Capital stock tax
- Sales and use tax
- Property tax
- Credits and incentives clawbacks
- Real estate transfer tax
- City business licenses
This is not an exhaustive list. While this information may seem overwhelming, you can rest assured knowing that Thompson Tax, your Trusted Tax Advisor, is here to help!
Why Choose Thompson Tax?
Experienced Tax Advisors
Our consulting professionals know how to expertly navigate the due diligence process for a merger or acquisition. We review all aspects surrounding prospective SALT implications so that you have peace of mind when the deal closes. Simply put, we have the tools and know-how.
Multistate Tax Services
Thompson Tax has locations across the U.S and our consulting professionals have a thorough knowledge about nationwide SALT issues. We are here to help and will guide you through the M&A process every step of the way.
Hands-on Approach
Thompson Tax strives to get a thorough understanding of the ins and outs of your organization then we tailor our M&A services to your specific needs. We will advise you on best practices and are always just a phone call away to answer any questions you may have during the process. Let us be your Trusted Tax Advisor.