Uncover opportunities to minimize state and local taxes
Minimizing taxes is a way of increasing cash flow. It’s an easy axiom to understand, but a hard one to execute especially when it comes to state and local taxes. Legislative, regulatory, and precedent-setting developments in tax are complex and always evolving. Staying on top of all of these state and local tax changes can be very time consuming. That is why so many organizations turn to our tax experts who continuously monitor the evolution of state and local tax rules.
A tax minimization review finds opportunity for savings
When a metal finishing and decorative coatings manufacturer called us in for a tax minimization review, we found that the local government had made an error in assessing taxable assets. Due to the timing of the discovery, recourse and appeal rights were limited. However, by working with the local assessor, we were able to secure a $35,000 refund of the prior year’s taxes and another $30,000 reduction in the current year’s taxes.
Entity structuring can help save taxes
Realigning its entity structure meant tax savings for a corporation with three transportation and three logistics subsidiaries. Each was a C corporation and had multistate operations with varying profit and loss positions. We recommended that they reorganize the C corporation subsidiaries into single-member limited liability companies, which permitted combining the two separate lines of business into groups that were able to combine results and reduce state income taxes by 25 percent.
Keeping up with the changes in tax laws is worth the effort
The current trend among states toward a market-based sourcing method for service providers offers a tremendous opportunity for savings. When our tax specialists helped a Michigan client providing professional services move from a cost-of-performance standard to a market-based approach, they were able to reduce the client’s 65 percent Michigan sales factor to less than 5 percent.
Tax credits and incentives often spell r-e-l-i-e-f
If you are planning an expansion, relocation, or merger and acquisition, we can help you determine which tax credits, exemptions, and abatements and which financing and infrastructure assistance services are available to you. For example, we know that when you spend money improving the skills of your employees, you can apply for training tax credits. We recently helped a discount drug store chain claim $100,000 in tax credits for its training program.
Minimizing your state and local taxes makes sense. Plante and Moran tax experts can help you do it.
Our state and local tax offerings include:
- Multi-state income and franchise tax
- Sales and use tax
- FASB ASC 740-10-35 (formerly FIN 48)
- Property tax
- Credits and incentives
- Audit defense and controversy resolution
- Voluntary Disclosure