We are a team of former Big 4 partners with over 100 collective years of state and local tax consulting experience. 
FOCUS ON STATE AND LOCAL TAXATION
Companies with multistate operations face complex state and local tax rules and regulations. Barnwell & Company, LLC can support companies facing mulit-state issues, including income and franchise taxes, allocation and apportionment, sales/use taxation, business license taxes, tax base issues including unitary, combined, consolidated and separate filing status, gross receipts taxes, UDITPA issues, state tax audit and controversy assistance, statutory and negotiated incentives, grants, training programs and awards, job and wage credits, investment and other state and local tax credits, and state tax planning in connection with mergers and acquisitions including state tax issues associated with 338(h)(10). Barnwell & Company, LLC also provides state tax consulting for FIN 48, and state tax planning, including structure reviews, consideration of entity for state tax purposes including use of Subchapter C, Subchapter S, LLCs, both regarded and disregarded, partnerships and other special purposes entities. We also provide state and local assistance and due diligence for mergers and acquisitions, and conduct sales/use and income/franchise reverse audits. Our work often leads to refunds of state and local tax overpayments.
The Sales Factor: Top Five Issues Taxpayers Need to Consider
The sales factor is becoming dominate in multistate apportionment; this leads to opportunities for the nimble and traps for the unwary.
The effect that the sales factor has on state income tax liabilities of multistate taxpayers has grown significantly over the past several years. Currently, ten states impose a "single sales factor" method, and more than 20 others give greater weight to the sales factor. The current emphasis on the sales factor contrasts with the apportionment landscape in earlier years when the sales factor was typically equally weighted with the payroll and property factors.
State Income Tax Uncertainty Under FIN 48
The reserve is set up, so now what?
The adoption of FIN 48 within corporate America required significant effort. The effort absorbed the resources of the accounting and tax departments of public companies, requiring an in-depth historical review of tax postures. For most public companies, the review encompassed various states, international jurisdictions, and federal income taxes. In instances where companies determined uncertainty as to nexus, the analysis usually extended to prior periods - sometimes involving a look-back in excess of ten years.
Addback: It's Payback Time
Since 2000, 18 states have enacted addback rules to curb perceived taxpayer abuses based on the use of interest and intangible-related expenses between related parties. Generally, those antiabuse statutes require the payer of related-party interest royalties, license fees, and similar charges to add back those expenses.
How Did It Come To This? Before dissecting the addback provisions, one must understand the historical background, or why 18 states have pushed those rules through their legislatures since 2000. The court decisions in the early 1990's set the stage.
The addback rules appear to raise the facial constitutional issues, and taxpayers will certainly bring those issues to court over the next few years. In many cases, companies with headquarters in unitary states had a natural ability to situs intangibles in the headquarters' state without the need (or risks) of creating a tax haven structure.
We offer a broad range of services to assist our clients in taking advantage of every tax savings opportunity, including:
- - State income & franchise refund tax analysis
- - State income & franchise tax planning
- - Sales & use tax refund analysis
- - Sales & use tax planning
- - State and local credits and incentives
- - State income/franchise & sales/use audit defense
- - Special state tax projects
- - Federal and state fuel tax recoveries
- - FIN 48 reserve mitigation
OUR SERVICE GUARANTEE
In every client engagement, we guarantee our service. This means that if the client is unsatisfied with our work, we will adjust or eliminate the fee. Our firm policy is to never leave a client unsatisfied. Period.
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