Louisiana recently announced a tax amnesty period beginning September 1, 2009 and ending October 31, 2009. The tax amnesty will apply to all taxes “administered and collected by [the Louisiana Department of Revenue], except for motor fuel taxes.” The state will forgive all civil penalties and half the interest otherwise due. Continue reading “Louisiana Tax Amnesty 2009”
The third article in a series on the purchase and sale of a Maryland business. In this article I address basic tax concepts and issues relating to a business sale.
A major consideration when purchasing an existing Maryland business should be minimizing the tax burden. Certain transactions provide tax benefits to either the purchaser or the seller while providing a tax burden to the other. Therefore, tax consequences should be considered when determining the appropriate purchase price. The general rule is that the sale of a business is a taxable event; however, the parties may be able to structure the transaction using a tax-free reorganization. The IRS provides several forms of tax-free reorganizations, but to qualify the parties must meet numerous requirements. Since the IRS only allows tax-free reorganizations under limited circumstances, I will first discuss taxable transactions.
The Maryland Tax Amnesty for 2009 officially ended on October 30, 2009, but if you missed the deadline you may still be able to negotiate payments and reduce your penalties for past due taxes. For instance, you may be able to use a Voluntary Disclosure Agreement. Please contact my office for more information.
The 2009 Maryland Tax Amnesty bill was signed into law on May 7, 2009, but the Maryland Comptroller’s Office will need to consider certain policy issues regarding its implementation. One obvious question Maryland tax attorneys and tax accountants are asking is, “What if you file prior to the Maryland Tax Amnesty period?”
Updated: I now provide a new article summarizing the final Maryland tax amnesty bill being sent to the governor and some policy issues the Maryland Comptroller will likely consider given the bill’s delayed implementation date.
The Maryland Senate jumped on the Amazon tax bandwagon despite disappointing revenues and damaging results for a prior enactor. The bill targets Amazon and select others who states portray as state tax scofflaws.
Because companies such as Amazon lack direct physical presence in Maryland, the U.S. Supreme Court’s 1992 Quill ruling does not permit Maryland to require these Internet-based companies to collect Maryland sales tax. Despite having no physical presence, states can confer physical presence if a state can establish a formal relationship between the company and an in-state agent, representative, or salesperson. Maryland seeks to require Amazon and similar companies to collect Maryland sales tax based upon its relationship to its Maryland “affiliates”.
Taking its cue from New York, California introduced legislation to require online retailers with no physical presence to collect sales tax for sales into the state. The California bill, Assembly Bill 178, resembles a similar New York statute that, thus far, has passed constitutional muster at least with the local judiciary.
States have been seeking to get their claws into Amazon and similar retailers for a decade. States argue that the increased prevalence of Internet merchants and their cannibalization of sales by brick-and-mortar local merchants has reduced sales tax revenues.