State Tax Planning
State income tax rates, laws and rules vary greatly from state to state. In addition to federal taxes, the great majority of states levy a separate state tax on individuals and corporations. Like federal taxes, the calculation of state tax is complex. Some states choose to follow federal rules while other states employ entirely different laws and rules for determining tax liabilities. Further, each state has its own laws and methods governing collection of tax, criminal tax matters, etc.
The tax attorneys and Certified Public Accountants at Moskowitz LLP, A Tax Law Firm have extensive experience in preparing multi-state tax returns and advising both individual and corporate clients on the most advantageous positions to take with state tax planning.
With the myriad of state income tax laws, some states may attempt to tax individuals on all of their income even if they did not live in the applicable state. Some states will cease taxing an individual as soon as he or she leaves the state. Other states, like California, use a 'residence' concept and may attempt to continue to demand and collect taxes on individuals during years they did not even live in the state in question. State taxes can be confusing but our professional tax attorneys know how to offer tax help to resolve the most complicated tax issues. We have successfully represented clients contesting state tax liability assessments. Below are some representative cases our firm has handled in regards to matters of state taxes.
- The state of Washington assessed a business owner $180,000 of state sales tax liability. Since the business owner failed to satisfy the assessed sales tax liability, the state of Washington proceeded to collect the outstanding sales tax liability from her former spouse by collecting the sales tax liability by issuing a state tax warrant against her. Through extensive negotiations, our firm convinced the state of Washington to remove the tax warrant against her. This resulted in an abatement of the entire $180,000 in tax.
- Advised clients regarding California tax implication to breaking residence with the state and becoming a resident for taxation purposes in another state.
- Advised a major state government municipality regarding deferred compensation and benefits plan.
- Advised a beneficiary of trusts located outside the state of California regarding taxation of trust distributions and strategies to mitigate tax California state tax liability.
- Advised a California high tech firm regarding the tax benefit of spinning off an entity in the state of Nevada.
- Advised a Delaware corporation on its California tax exposure in the wake of a merger with a California limited liability company.
- Currently litigating in Superior Court against the Franchise Tax Board regarding domicile/residency issues. Tax amount at stake: Over 1 million dollars.