“Merging or acquiring? Don’t forget state and local taxes.”

By Terry Barrett, CPA, Tax Senior Manager

“Merging or acquiring? Don’t forget state and local taxes.”

Terry Barrett, Keiter Tax Senior Manager and Leader in Keiter’s State and Local Tax team, was featured in the March/April 2018 issue of VSCPA’s Disclosures Magazine article, “Merging or acquiring? Don’t forget state and local taxes.” This includes certain state and local taxes, such as income/franchise tax and property tax, that may represent potential liability or exposure.


Potential state and local tax considerations are often given only cursory attention in a merger or acquisition. If the transaction is structured as the acquisition of stock (or ownership interest in the case of a non-corporate entity), the acquiring company is obtaining the target and all of its tax liabilities and exposures, except for those which may be mitigated or limited through the purchase agreement. Therefore, it is very important that the acquiring company identify — and, if possible, quantify —  potential liabilities and exposures before finalizing the transaction.

Obtaining the information necessary to do this, though, is often hampered by the confidentiality of the proposed transaction and cooperation on the part of the target company. However, given the potential exposure, it’s imperative to analyze the target’s tax situation as thoroughly as possible. This article focuses on some of the state and local tax issues that may represent potential exposure or liability.

Questions on this topic? Contact your Keiter representative or our State and Local Tax team | 804.747.0000 | Email.

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About the Author

Terry Barrett

Terry Barrett, CPA, Tax Senior Manager

Terry Barrett specializes in state and local tax concerns for her clients. She has over 30 years of experience working in the public and private accounting sector. She is a graduate of Virginia Commonwealth University.

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The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.


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