The importance of pre-transaction sell-side SALT due diligence
Sell-side due diligence is often overlooked but can be advantageous
INSIGHT ARTICLE |
Authored by RSM US LLP
This article was originally posted on January 12, 2017
There has been considerable merger and acquisition activity in the past few years, especially in the middle market. Coupled with the significant multiples being paid for businesses, this activity has owners eyeing the market and wondering if it’s time to sell their businesses before the next economic downturn reduces the value. Whether the owners are individuals holding businesses that have been in their families for years or private equity firms, the goal is to maximize the value of the entity being sold.
Although the objective may seem simple, achieving it requires substantial time and effort. While the main focus in a transaction is generally on a selling company’s financial statements, there are many components that affect those financial statements. State and local taxes often don’t get much attention, but can nonetheless have a substantial impact on the economics of a deal.
In this article, first published in Tax Analyst's State Tax Notes, authors John Wojcik and John Wozniczka discuss how pre-transaction state and local tax due diligence can help companies and individuals selling a business:
- Identify and remedy tax exposure before a sale
- Maximize purchase price
- Understand the costs and benefits of common transaction structures
Sell-side state and local tax due diligence can be highly advantageous to a selling entity. It is a proactive approach, which puts a seller in a better position to discover potential tax issues, control the way to resolve any issues and maximize the expected returns when selling a business. By properly preparing for a sale through pre-transaction sell-side tax due diligence, a seller can fix issues before they arise.
Call us at +1 213.873.1700, email us at email@example.com or fill out the form below and we'll contact you to discuss your specific situation.
This article was written by John Wojcik, John Wozniczka and originally appeared on 2021-09-20.
2021 RSM US LLP. All rights reserved.
The information contained herein is general in nature and based on authorities that are subject to change. RSM US LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM US LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.
RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
Vasquez & Company LLP is a proud member of the RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise and technical resources.
For more information on how Vasquez & Company LLP can assist you, please call +1 213.873.1700.
Subscribe to receive important updates from our Insights and Resources.