Archive for State And Local Tax

State And Local Tax: Controlling Interest Transfer Tax

State And Local Tax: Controlling Interest Transfer Tax

Do you own an entity that holds real estate?  Are you thinking about selling real estate?  Are you considering selling the real estate asset or selling the entity that owns the real estate?

Generally, a real estate transfer tax is imposed on documents that convey an interest in real estate from one person to another person. The transfer tax, generally, is imposed on the recordation of a deed and is based on the consideration paid or the fair market value of the property (the “Real Estate Transfer Tax”).

Taxpayers utilized loopholes to avoid paying the Real Estate Transfer Tax, by selling the entity that owns the real estate instead of selling the real estate itself.  Approximately 17 states have closed such loopholes.

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Written by | Posted in Freeman Law • State And Local Tax

State And Local Tax: Entity Formation For Certain Texas Activity

State And Local Tax: Entity Formation For Certain Texas Activity

My colleague, Matthew Roberts, recently posted an article regarding choice-of-entity, “Starting a Business in Texas:  Choice of Entity.”   The article provided a summary of the tax and non-tax implications of each potential entity type.

We will discuss “passive entities” under Texas law.  Please note the definition of a passive entity under Texas law is not the same as the definition under the Internal Revenue Code.   Depending on the business being conducted in Texas, a certain type of entity may be more beneficial to reduce or eliminate your  Texas Margin Tax (the “Margin Tax”).

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Written by | Posted in Margin Tax • Passive Entities • State And Local Tax

State And Local Voluntary Disclosure

State And Local Voluntary Disclosure

This article is the second of a three-part series regarding the State and Local Tax consequences of doing business in multiple states. This article will discuss Voluntary Disclosure, Part 1 discussed Nexus and Part 3 will discuss the Audit Process.

The Wayfair decision changed the landscape for nexus in the sales and use tax area. It lowered the bar to establish nexus with a state, which gives a state the right to require the collection and remittance of sales and use taxes. The Supreme Court’s decision changed the nexus focus from the existence of a physical presence to an economic presence—which generally may be based on sales into the state themselves. As a result, many taxpayers may have triggered the nexus threshold, especially if a state imposes a factor presence standard for income, franchise or gross receipts taxes.

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Written by | Posted in State And Local Tax • Voluntary Disclosure