Does Your Company Have a "State and Local Tax Plan"?
Do you have a "plan"? A plan for personal life or business? A plan for this week, this month, this year, etc.?
Do you have a "strategic plan" for your business? Do you have a growth plan?
It is often said, that if you don't have a plan, you will achieve nothing. Before you plan, you have to have a vision or goal of what you want to accomplish. Then you build your plan. I know, there are mountains and mountains of books on building plans and strategic plans, etc. So my goal is not to go into that here. What I want to know is - does your business have a "state and local tax plan" or is your company just "winging it"?What is a "state and local tax plan"?
It is a strategy or focus detailing how the company should manage its state and local tax positions, exposure, liabilities, audits, estimated payments, provision (FAS 109 / FIN 48), etc. as it relates to the company's business. As the business changes, the company can have a plan in place for how the state and local tax impact will be handled or resolved. Obviously, this plan, just like a business plan, should be flexible and adaptable as facts change. However, this plan can help a company address all of its state and local tax concerns.
Does your company know how it will handle the state tax impact of acquiring a company? What about the post-integration issues? Outstanding liabilities?
Does your company know how it will handle outstanding nexus issues if a state sends a notice or nexus questionnaire? Has the company taken a proactive or reactive approach to resolving state and local tax exposure?
Is the company documenting its intercompany transactions appropriately to avoid state tax addback provisions or forced combination?
And the list goes on, and on, and on.
Does your company have a state and local tax plan?
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
You can reach Brian at firstname.lastname@example.org.
Because state and local taxes are deceptively simple and endlessly complicated.