State and Local Tax

Overview

Across the country, BakerHostetler attorneys advise clients with respect to complex state and local tax matters in the single and multiple-jurisdiction context. We assist with planning transactions, dispute resolution, obtaining written guidance on tax issues, negotiating incentives, entering into voluntary disclosures, and providing advice on issues common to multiple states. Our experience extends to income, sales and use, gross receipts, property (both real and personal) and miscellaneous state and local taxes. We have been assisting clients with unclaimed property issues for more than 30 years.

In the area of dispute resolution, we are effective advocates for clients in their disputes with state and local tax authorities. We frequently negotiate favorable reductions in audit adjustments and, when necessary, in litigation, including numerous successful appearances before the state’s highest courts. We get results by combining the readiness to litigate with a willingness to negotiate with state tax authorities, and our reputation gives us the strength to advance client interests before legislators, policymakers, and administrators with respect to state tax matters. Our attorneys are especially effective, from the audit level through appeals, due to our strong working relationships with state departments of taxation and finance—specifically in Ohio and New York, boards of tax appeals, and the appellate courts. Our broad approach to problem solving can sometimes involve working with state legislatures and policymakers to help protect the interests of our clients.

We advise the owners and operators of businesses on the state and local tax implications of mergers, acquisitions, asset sales, and other transactions. Our tax lawyers have developed creative and sophisticated tax-planning ideas and solutions relating to the purchase, sale and financing of publicly traded and privately held companies and the maintenance of management and ownership continuity for closely held business enterprises. We remain at the forefront of the use of limited liability companies, partnerships, joint ventures, and S corporations to own and operate business activities in a tax efficient manner.

We have assisted clients in obtaining incentives from states and localities when making new investments or for retaining employment levels in the state or locality. At the local level, we help clients explore and implement property tax abatement opportunities and enterprise zones to promote new business investments and real estate developments. We assist in negotiating the incentive agreements including Tax Increment Financing but also ensure that the state or locality has the authority to provide the promised benefit. We have addressed multiple situations in which state law did not authorize the proper incentives. In these instances, we represented clients before the state legislature to change the law to ensure that promised benefits actually would be available.

We have analyzed new or expanded business activities of our clients for state and local tax implications. Examples of some of these projects include an examination of nexus—determining for which states the company will be required to pay tax or to collect sales or use taxes from customers and a determination of which states would tax services provided by means of cloud computing. We have worked extensively in matters related to challenging state determinations that our client is domiciled in the state for tax purposes. We assisted in writing the rules with respect to addressing the domicile questions in Ohio and have represented clients dealing with nexus issues in many states. We have also assisted clients that face demands from taxing authorities to pay tax on deferred compensation after leaving the state.

Although unclaimed property audits are not technically tax audits, our experience with tax audits has formed the basis for our representation of clients dealing with unclaimed property compliance issues as well as dealing with audits. The increased use of multistate contingent fee auditors has greatly expanded our work in this area. We have also represented life insurance and bank clients with respect to the expanding areas of inquiry by the states and multistate auditors.

We continually monitor state tax legislation, including federal legislation restricting state taxation. We work with legislative bodies and regulatory agencies enacting new laws or interpreting the laws through regulations on behalf of individual or groups of clients.

Select Experience

  • We have successfully partnered with tax professionals across the country in providing a unified service for our clients across state lines with respect to multistate tax issues and our lawyers have spoken nationally on these issues.
  • Represented numerous clients in securing tax and non-tax incentives from states and localities, including property, sales, and income tax benefits, as well as preferred financing and tax increment financing.
  • Negotiated $6.2 million refund of Ohio use tax for a manufacturer.
  • Contested property values for a chain of restaurants in various communities for real estate tax purposes.
  • Significant experience in defending taxpayers in domicile and residency challenges in New York City and the states of New York and Ohio.
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Experience

  • Represented numerous clients in securing tax and non-tax incentives from states and localities, including property, sales, and income tax benefits, as well as preferred financing and tax increment financing.
  • Negotiated $6.2 million refund of Ohio use tax for a manufacturer.
  • Contested property values for a chain of restaurants in various communities for real estate tax purposes.
  • Significant experience in defending taxpayers in domicile and residency challenges in the New York City and the states of New York and Ohio.
  • Litigated a test case for local taxes applicable to senior executives for multiple clients.
  • Negotiated a $650,000 refund of Ohio income tax related to stock options.
  • Obtained reductions in manufacturing/printing/public utility facilities for tax purposes.
  • Represented companies undergoing multistate unclaimed property audits.
  • Assisted clients for state and local tax issues arising from providing service on a cloud-based platform.
  • Assisted clients with multi-state voluntary disclosure agreements.
  • Provided sophisticated tax planning on behalf of hedge funds and other business entities with respect to the nuances associated with the unincorporated business tax in the city of New York.

Recognition

  • Chambers USA: Tax in Washington, D.C. (2010 to 2016)
  • The Legal 500 United States: Tax: Taxes: Non-contentious (2015, 2016)
  • BTI Client Service 30: BakerHostetler advanced 19 positions to #9 (2016)
  • U.S. News - Best Lawyers "Best Law Firms" (2016)
    • Litigation - Tax
      • National Tier 1
      • Metro Cleveland, Tier 2
      • Metro Denver, Tier 1
      • Metro Washington, D.C., Tier 2
    • Tax Law
      • National Tier 1
      • Metro Cleveland, Tier 1
      • Metro Columbus, Tier 1
      • Metro Denver, Tier 1
      • Metro Washington, D.C., Tier 1
  • The Best Lawyers in America© (2016)
    • 13 lawyers named in Tax Law
  • Who’s Who Legal 2013 recognized two partners in the area of Corporate Tax.