Navigating complexity to minimize tax liability
Tax laws at the state and local level are complex and constantly changing. We understand nuances in state and local taxation (SALT) across jurisdictions and industries, and we’re diligent in fact-finding to build the best possible case for our clients. We’ll help you minimize tax exposure through sophisticated analysis, prudent strategies, and successful legal arguments.
Jurisdictional differences in state and local tax treatment; divergent state statutes, regulations, administrative rulings and case law; and varying tax exemptions across states can all lead to an excessive tax burden – for both US-based businesses and multi-national taxpayers earning revenue in the US.
That’s why clients across a broad range of industries and business operations turn to us for help with their SALT matters, including income tax, sales and use tax, real estate transfer tax, and other specialty taxes in multiple states and localities.
“My DLA service team was small, but efficient and mighty. They mastered my company’s facts, including the confused computations of an earlier advisor, and marshaled those facts against the legal rules exceptionally well.”
We focus on understanding the individual needs and circumstances of each client’s business. We carry out detailed factual development to uncover all relevant information for every SALT matter. And we closely monitor new legal developments and existing precedent, so that we can develop optimal legal arguments in active tax controversies.
We provide sophisticated and creative analysis, particularly on questions of traditional, factor presence, and economic nexus; sales tax collection obligations; taxes applicable to service transactions and e-commerce transactions including digital products and services; multi-state apportionment; real estate transfer taxes; and unclaimed property matters.
Our attorneys are experienced in framing and arguing issues to optimize results for clients in SALT audits, in negotiations with state and local revenue authorities, and in representing taxpayers before administrative tribunals and in judicial proceedings including appeals to appellate courts. Throughout the planning and controversy stages, we provide effective strategies to counter revenue agency positions that might otherwise result in excess tax liabilities.
Our in-depth knowledge and experience of SALT matters has helped clients in a wide range of industries to navigate inconsistencies and ambiguities in tax laws and minimize tax liability. Those industries include technology and e-commerce, telecommunications, franchising, retail, manufacturing, hospitality, and real estate.
Awards and Recognitions
Experience
- Successfully represented the taxpayer in Stanard v. Director, Division of Taxation, Docket No. 008149-2018 (N.J. Tax Ct. Feb. 24, 2020), and the Court, agreeing with our novel argument based on a New Jersey regulation, upheld the character of a substantial loss realized by a partnership, which was owned by a single-member LLC of an individual owner, as a partnership loss that could offset other partnership income of the individual taxpayer for New Jersey Gross Income Tax purposes.
- Obtained a concession from the Texas Comptroller reversing the audit determination that the taxpayer’s California and Texas real property development and home selling operations were engaged in a unitary business
- Represented taxpayers in tax audits involving the allocation factors for the New York City general corporation tax and combined reporting issues for affiliated corporations
- Assisted a provider of network infrastructure management services with a multi-state sourcing analysis for services provided electronically from remote locations
- Negotiated the multi-state apportionment of capital gains arising from a partnership’s sale of an interest in communications spectrum originally sought to be taxed in full by multiple jurisdictions
- Successfully argued that the conditions for application of the “throw-back rule” were not satisfied during the course of a California Franchise Tax Board audit of a multi-national corporation
- Successfully drafted and advocated for the ultimate passage of a new Nevada sales tax regulation designed to put e-commerce client on equal footing with its floral industry competitors
- Obtained a hearing determination from the State of Washington upholding the client’s sourcing and resale treatment of electronic services provided to telecommunications carriers in delivering emergency E-911 cellular phone calls
- Defended franchisor in New York State sales/use tax audit that raised numerous legal issues and successfully reduced large proposed assessment to an immaterial amount of sales/use tax liability.
- Developed strategies for a seller of merchant coupons offered through on-line affiliate network marketplaces, to address the impact of state click-through nexus provisions on the seller’s business
- Obtained Texas sales tax audit concessions that taxable services were properly sourced to a customer’s principal place of business and not the Texas location asserted in a proposed assessment
- Identified state specific exceptions to marketplace facilitator sales tax characterization for online platform seller of recreational and amusement services
- Successfully defended parties to fourteen (14) large, interrelated New York transfer tax in complex corporate restructuring that led to no change in any of those transfer tax audits.
- Handled multi-state real estate transfer tax matters in M&A transactions, including transfer tax planning, reporting and compliance.
- Advised clients on the reduced New York transfer tax rate for transfers to a REIT and represented a client under audit in a conciliation conference involving a REIT transfer issue of first impression that led to a fair settlement
- Used the bankruptcy exemption under federal and state law to eliminate a significant transfer tax liability of an entity that underwent a bankruptcy reorganization and transfers related to that reorganization and to avoid transfer taxes on the transfer of securities relating to the bankruptcy reorganization of a different debtor.
- Drafted successful response letters to several California municipalities attempting to impose utility users tax on a telecommunications service provider offering service plans for a fixed monthly rate
- Successfully represented major hotel chains in a dispute over municipal hotel occupancy tax liability for reservations booked through online travel companies
- Representing large financial company, along with over 200 of its subsidiaries, in a voluntary disclosure with the Delaware Secretary of State to address unclaimed property matters in Delaware.
- Assisted a computer equipment seller, holding unused outstanding credit memorandums issued to customers, with analyzing and applying the unclaimed property business-to-business reporting exemption in various states
- Obtained a voluntary disclosure agreement on behalf of a taxpayer that had failed to file real estate transfer tax returns in connection with a prior restructuring and failed to report over USD3.5 million of transfer tax liability; we were informed by administrators of the program that this was the first time they had accepted a voluntary disclosure relating to transfer taxes, and the client was thus able to avoid extensive penalties in that matter.
- Representing 29 hotels, including all major brands and many independents, in lawsuits related to the taxability of their 'merchant model' transactions with online travel companies and the extent to which occupancy tax applies to those transactions
- Representing major airlines and hotels regarding exemptions from occupancy tax under permanent residency rules and the applicability of California's Proposition 218
