Navigating Sales Tax Risks in Mergers and Acquisitions: A Comprehensive Guide

• Mergers and acquisitions are rebounding after a slump post-pandemic
• Many M&A deals fail due to bad due diligence, including overlooking past sales tax liabilities
• Sales tax risk can expose up to 10% of a business’s revenue, including penalties and interest
• Due diligence should involve scrutiny of target company’s tax background, sales tax histories, and nexus with tax jurisdictions
• Review taxability of products/services, customer base, and statute of limitations
• Estimate prior-period exposure to set strategy to mitigate liability before M&A deal

Source: taxconnex.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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