State and Local Tax Planning

Baker Botts has a dynamic state and local tax section providing state and local tax planning services throughout the U.S. Our state tax lawyers help businesses create structures to minimize state and local taxes, including income, franchise, sales, property and excise taxes. The section also works with taxing authorities throughout the U.S. to address important tax issues for clients in a variety of business sectors.

Our planning services include multistate apportionment planning, nexus studies, advance letter rulings and analysis of internal compliance procedures. We understand state and local tax laws and trends throughout the U.S., enabling us to assist our clients in establishing a comprehensive nationwide state and local tax strategy. Where the law is unsettled, our relationships with key administrators in state taxing agencies allow us to proactively establish tax policies favorable to our clients.

Our planning services include:

Multistate Combination and Apportionment
We advise our multistate clients on all issues relating to unitary combination, apportionment, and allocation (e.g., water’s edge elections, market-based sourcing, throwback rules, business v. nonbusiness income, etc.), with a focus on establishing a consistent national strategy that minimizes state income and franchise taxes.

Nexus Planning
We assist our clients in navigating the disparate nexus standards adopted by the states, conducting enterprise nexus studies, and establishing and communicating internal policies and procedures that affect nexus. We also have significant experience addressing related party add-back and deduction disallowance rules.

Sales and Use Taxes
We assist clients in identifying and minimizing exposure to sales and use taxes in connection with a wide variety of transactions, including mergers, acquisitions, dispositions, financings, sale-leasebacks and leases. We also assist clients engaged in e-commerce and other digital technologies apply outdated or emerging laws to their businesses.

Compliance Planning
We advise our clients on establishing compliance policies and procedures, including managing federal audit adjustment notification requirements, establishing unclaimed property compliance procedures, and identifying organizational adjustments to minimize compliance burdens.