Avoiding Sales Tax Pitfalls in Mergers and Acquisitions: Key Risks and Compliance Strategies

• Undisclosed sales tax obligations can jeopardize mergers and acquisitions, causing deals to fail or require costly escrows.
• Due diligence should thoroughly review sales tax compliance, including nexus, thresholds, and the taxability of products and customers.
• Identifying prior-period sales tax liabilities early allows for better mitigation options, such as voluntary disclosure agreements.
• Post-M&A, companies should manage compliance and consider mitigation strategies like retroactive remittance, exemption documentation, or escrow.

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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