Nexus, apportionment, market-based sourcing, voluntary disclosures… no single business can stay on top of all the state-by-state legislation and regulatory guidance changing SALT income tax strategies today.
That’s why Eversheds Sutherland has a multistate team of attorneys dedicated to knowing the latest — and using it to your advantage.
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Every day, the factors affecting SALT income tax are changing
Our team stays a step ahead of the federal, state and local income tax rules on all the biggest issues:
Income tax apportionment
Apportionment of income taxes can be a complex and factually intensive task. Add in tasks like sourcing sales of services or intangibles or use of alternative apportionment and it only gets harder, particularly when coupled with multistate income allocation that’s bound to each state’s unique apportionment statutes and regulations.
At Eversheds Sutherland, we have extensive experience helping multistate businesses find the most favorable sourcing and/or approach to state apportionment of corporate income in compliance with the latest laws and best practices. We also regularly assist taxpayers with state audits and settlements, administrative appeals and litigation involving apportionment and allocation issues.
With significant experience assisting businesses with apportionment and sourcing issues, we can guide you through the often convoluted and intricate state market-based sourcing rules.
Our team has followed the latest legislative and administrative developments coming from market-based sourcing states closely, so we can offer our experience on how the rules apply to your business. With many states still not providing comprehensive guidance on their sourcing rules, the team at Eversheds Sutherland can help you achieve compliance with state law while determining the most favorable sourcing approach.
Not all states have adopted market-based sourcing of services and intangibles, but apply a cost-of-performance methodology. Our team has a strong track record of successfully defending taxpayers in disputes where the state has challenged the taxpayer’s use of cost-of-performance sourcing.
If you’re trying to navigate cost-of-performance sourcing states, we can advise on how the latest rules apply to your business, keeping you in compliance with state law while doing what’s best for your business.
Income tax nexus
Income tax nexus requirements vary by state and application requires a thorough understanding of the business and the law. We can provide both, reviewing your operations and advising you on whether your activities may trigger nexus — and create an income tax obligation — in specific states.
Proactively complying with state income tax nexus laws can prevent costly and time-consuming audits and disputes. Should you need it, however, Eversheds Sutherland has a wide breadth of experience successfully defending businesses in state audits, administrative appeals and litigation involving state nexus and income tax issues.
Unitary business and combinations
Our team can help your business analyze operations to determine if various affiliates qualify as a unitary group for tax purposes, including when acquiring a new entity. From there, we can assist with the necessary legal analysis and planning surrounding unitary issues, and draw on our work successfully representing businesses in state audits and settlements, administrative appeals and litigation involving unitary issues.
Business vs. nonbusiness income
Our attorneys can help you properly classify income as either apportionable (business income) or allocable (nonbusiness income) under state law anywhere in the country, and advise on how to structure transactions such as the disposition of an asset, division, or subsidiary based on the classification. Should you need to defend your decisions, our team brings substantial experience with business and nonbusiness income audits and settlements, administrative appeals, and litigation.
State income tax conformity to federal law
Eversheds Sutherland attorneys stay on top of state income tax conformity issues, so we can advise on all the state-specific implications of a particular transaction. Alongside our robust federal tax team, we can help you plan every transaction to achieve the best tax outcomes.
We can help you with every step of flow-through taxation, from advising on structuring entities in the way that will be most beneficial for state tax purposes to assisting in audits, administrative appeals and litigation.
For individuals who are unsure about state residence — or who are considering a move and/or future residency planning — Eversheds Sutherland has the experience necessary to advise on the best decision for your situation. We also have a successful record of defending individuals in state residency audits, administrative appeals and litigation, leveraging our attorneys’ insights into the factors states examine and the policies surrounding residency to inform our cases and our planning.