SALT - State and Local Tax Law
Dickinson, Mackaman, Tyler & Hagen’s state and local tax attorneys have significant experience counseling clients in all facets of state and local tax matters including income taxes, excise taxes (e.g., sales, use, fuel, and cigarette), and real property tax. Within these areas, our attorneys provide services in the following substantive areas: general SALT counseling, tax controversy and appeals, mergers and acquisitions, and credits and incentives.
State taxes are complicated and our attorneys’ focus on SALT issues allows us to answer the most complex questions regarding sourcing, sales tax collection or payment obligations, nexus, and property tax exemptions. Representative matters include:
Review of Iowa manufacturer’s sales and use tax processes resulting in identification of tax overpayments, tax saving opportunities and process gaps that created tax risks. Review resulted in tax refunds in excess of $400,000, millions of dollars in future savings, and recommendations for process improvements to reduce gaps
Advise multi-state food manufacturer on the taxability of sales of prepackaged food products to private individuals and non- and for-profit health care entities located throughout the United States.
Provide opinion of whether the purchase or lease of certain equipment used in construction projects was exempt from sales tax.
Determine whether property used by an affiliate of a non-profit entity as a daycare was exempt from property tax.
Tax Controversy and Appeals
Dickinson’s attorneys regularly assist clients in all stages of the tax controversy process beginning at the audit through appeals to the Supreme Court. Dickinson’s property tax attorneys have gained a unique insight into property tax appeals by representing both government entities and private businesses in property tax appeals. Representative matters include:
Successfully represented Iowa taxpayer in sales tax audit regarding the taxability of meals subsidized by the employer, resulting in no tax due on that issue, and obtaining sales tax refund on identified overpayments.
Represented Illinois taxpayers in Iowa individual income tax audit regarding residency, ultimately reducing the Iowa Department of Revenue’s assessment by more than $2.5M.
For tax year 2015, represented an Iowa county in appeals of properties having a total value in excess of $135M, limiting the reduction of property tax values by only $19M. Similar results obtained for other counties.
Mergers and Acquisitions
The acquisition of an entity may expose the buyer to the seller’s past tax liabilities, which may affect the purchase price. When representing buyers, Dickinson’s attorneys identify potential state and local tax liabilities of the seller and work to adjust the terms of the sale to reflect the potential liabilities. As counsel for sellers, Dickinson’s attorneys proactively spot potential liabilities that may negatively impact the terms of the sale and work to mitigate those liabilities through voluntary disclosures with government entities. Representative matters include:
Performed buy-side due diligence for the acquisition of a water testing division that performed water testing services to governmental and private entities in all 50 states.
Performed sell-side due diligence for the sale of a multi-state food manufacturer that delivered ready-to-eat meals to governments, managed care organizations, and private individuals in more than 25 states.
Credits and Incentives
The state of Iowa provides a wide array of tax credits and incentives that are often overlooked by relocating or growing companies. Tax credits and incentives are not limited to companies making multi-million dollar investments and may be available to companies making investments of far less. Dickinson’s tax attorneys are experienced in all phases of the credits and incentives process, including evaluating the availability of tax credits and incentives for each particular company or project, negotiating the terms of the incentives contract, and—once the credits and incentives are received—complying with the State of Iowa’s credit and incentive requirements.