1. M&A tax considerations are important for both buyers and sellers to avoid unexpected tax liabilities after a deal closes.
2. Federal tax issues, particularly in relation to net operating losses, need to be thoroughly considered in M&A transactions.
3. Pre-closing tax liabilities should be carefully reviewed to ensure adequate coverage in the event of claims from the escrow account. – Sellers often do not realize they have not been collecting adequate state sales taxes, leading to complications in M&A transactions.
– Online businesses operating globally may not fully understand where they are doing business and the resulting tax implications and liabilities.
– Each state operates as its own separate entity, so sellers must determine their taxability with each state and pay the appropriate taxes.
– More states are pursuing stricter enforcement of their statutes, and collection of sales taxes is one way to address budget shortfalls.
– Sales tax issues can create havoc midway through the M&A deal process and may require adjusting the purchase price to factor in the liabilities. 1. Non-payment of sales tax can lead to tax liabilities for a software-as-a-service (SAAS) technology company, impacting its bottom-line performance.
2. Mergers and acquisitions (M&A) deal parties should conduct thorough tax due diligence to identify any tax issues before closing the deal.
3. Technology and pharmaceutical companies face challenges in navigating sales tax issues, especially with the emergence of new technologies and state-specific tax regulations.
4. M&A tax issues arise in almost every transaction and can create chaos for all involved if not addressed properly.
5. Sellers may find that they have not set aside enough funds to cover potential tax liabilities, leading to complications in the M&A transaction.
6. Some sellers may voluntarily disclose unpaid tax liabilities through a Voluntary Disclosure Agreement (VDA) to mitigate penalties and potential delays in the M&A transaction. – Extensive experience and specialization in M&A tax issues, including tax dispute resolution and international tax interests
– Proficiency in other aspects of the M&A deal process, leading to a deeper understanding of the transaction
– Ability to streamline the M&A deal process and tax needs, reducing delays and inefficiencies
– Forward-thinking approach to future tax changes and historical knowledge of tax rules for handling pre-transaction liabilities – M&A deal parties should consider outside tax expertise to focus on M&A tax concerns.
– Utilizing one firm for all elements of an M&A transaction can streamline the experience and translate into an efficiently and fully synergized deal.
– Early identification and mitigation of tax liabilities can help ensure that M&A deal flows smoothly from the start.
– SRS Acquiom’s M&A Tax Advisory team possesses valuable perspective on tax documentation and issues.
– In-house federal and state and local tax experts work through complicated tax issues on an expedited time frame to facilitate post-closing deal matters and favorable tax claim resolutions.
– Natalie Kleffman manages post-closing matters at SRS Acquiom, working directly with key buyer and seller stakeholders to resolve indemnification claims and disputes, with an emphasis on tax issues.
– Natalie’s combined background as an attorney and tax professional provides her with a unique perspective in managing various tax disputes. – Natalie earned her JD from UC Berkeley School of Law (Boalt Hall)
– Natalie earned her BA in Economics, cum laude, from UCLA
– Natalie served as Co-Chair of the Berkeley Tax Law Clinic
https://www.srsacquiom.com/our-insights/ma-tax-advisory/
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