Robert Peters in Bloomberg Tax – State of Wayfair Tue, Nov 19, 2019

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Robert Peters in Bloomberg Tax – State of Wayfair

Robert Peters, Managing Director in the Tax Services practice at Duff & Phelps, was quoted in an article in Bloomberg Tax titled, “State of Wayfair: Unpaid Tax Liability Is New M&A Concern”. The Wayfair ruling is sowing worry in the world of mergers and acquisitions (M&A).

Robert says, “A target company’s unpaid taxes have always been on buyers’ checklists when it comes to conducting due diligence before a sale.” But in the aftermath of the June 2018 Supreme Court South Dakota v. Wayfair ruling, many more potential targets than before don’t know the extent of their tax liability, and, in some cases, haven’t given any thought to the ramifications of the world in which states can charge tax on remote vendors’ sales.

Since the decision, more than 40 states have begun imposing remote sales tax based on economic nexus, a measure of in- state sales, as opposed to physical presence. In addition, more than 30 states have passed marketplace facilitator laws, which place a tax collection duty on large online websites. “Acquiring companies are finding they might wind up with a sales tax bill under the expanded definition of nexus in states with successor liability laws”, Robert said. He continues that “This creates a lot of ill will between buyers and sellers, who’ve been known to say, ‘I don’t have physical presence, I was selling through Amazon,’” he said. “We’ve see this lower the purchase prices of some deals.”

Read the full article here.

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