TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, April 26, 2006

ABA Tax Section Offers Teleconference & Webcast Today on Net Worth Tax Pitfalls

Aba_tax_7 The ABA Tax Section is offering a teleconference and webcast today on Net Worth Tax Pitfalls and Techniques to Avoid Them or What You Don’t Know Can Hurt You from 1:00 - 2:30 p.m. EST:

States including Illinois, Louisiana, and Pennsylvania, among others, impose significant franchise taxes based on a company’s net worth. Business advisors should be knowledgeable about these taxes when recommending a business restructuring or assisting with an acquisition or merger. The form of the transaction may trigger (or save) significant annual net-worth taxes. Learn how having a multi-tiered structure, making a § 338(h)(10) election, or employing push-down accounting, including the use of a “revaluation-capital account” when recording a business acquisition, may have a meaningful impact on a company’s annual franchise tax liability. The panel will also discuss the requisite “nexus” for a state to impose a net worth or franchise tax, and explain the differences between the nexus standards for franchise, net income, and sales/use taxes. The panel will also discuss recent court developments with respect to net worth and franchise taxes.


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