Lease Syndication Transactions: How Do You Do It?
Do you or your clients buy blocks of leases that were originated by brokers or other equipment lessors?
In many cases, parties in these transactions wish to retain servicing of the sold leases, and maintain what is known in the industry as "blind" status with their customers/lessees (i.e....the lessees don't know that their lease has been sold or assigned).
At the same time, state and local departments of revenue and their in-house and out-sourced auditors, are being very aggressive in regards to sales and use tax and personal property tax assessments. NEED YOUR INPUT
In the interest of gathering best practices for managing SALT-related risk in this area, otherwise known as "lease syndication" transactions, I would like to gather input from others to determine if there is a generally accepted way of transferring sales and use tax and/or personal property tax filing obligations from a seller to a buyer in a lease syndication transaction.
By "generally accepted" I mean a method that is: 1) commonly used within the industry, and 2) consistently accepted by state and local taxing jurisdictions.
In the absence of such a generally accepted method, how do equipment leasing companies quantify and manage the tax risk they assume by either taking on or assigning away filing responsibilities?
Please respond to this post by either sending me an e-mail at email@example.com or by posting a comment to this blog post. Thank you.
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.