Tax laws reach into every area of business life, and even some aspects of personal life. Our clients rarely conduct their affairs solely to minimize their taxes, but no prudent decision maker can afford to act without considering the tax ramifications of all the options – federal, state, local, and even international – or exploring whether there might be options not thought of yet that would yield a better tax result.
Choices made in the first days of establishing a new business, or a new project within an existing business, have tax consequences reaching far into the future. We help our clients lay a firm foundation for success down the road by matching entity form and financial structure to the anticipated needs and qualities of the enterprise, and by making certain that, whatever the form chosen, our clients have maximum flexibility to meet the business challenges they face in a tax-efficient manner. We also work closely with their accountants and bookkeepers to make certain that everyone is clear on the tax-related issues.
Transition from one generation of leadership to the next is a key challenge for any business, but especially for family-owned and middle market businesses. In family businesses, federal and state estate and gift taxes affect strategies for passing the business to the next generation, as well as making certain that children not active in the business are treated fairly. In non-family-owned businesses, the goal is often to let future owners accumulate equity at the lowest tax cost possible, while providing a tax-efficient exit strategy for current owners.
Employee Stock Ownership Plans (ESOPs) can be a valuable, tax-advantaged option for ownership transition. Our lawyers are experienced in advising clients on the tax benefits and issues arising when ESOPs are involved in the purchase or sale of a business. Our lawyers also understand the tax compliance requirements of operating an ESOP, including the rules related to exempt loan transactions.
Limited liability companies and limited partnerships provide attractive, flexible structures for layering equity investment in a business and allocating tax liabilities and benefits. However, the applicable federal tax regulations can seem very obscure and difficult to comprehend. We are experienced in guiding clients through these complex rules to obtain the favorable results they seek. This can be especially important when financing is pursued through tax-exempt sources (including individual retirement accounts) or foreign investors.
New Markets Tax Credits can be an important element in financing middle-market business development or expansion projects in or near low-income neighborhoods. We are thoroughly familiar with current deal structures for maximizing the effect of NMTC financing, and we have given NMTC opinions on behalf of business clients in projects involving major banks and national economic development nonprofits as partners and funders. Our Government Relations team is well-positioned to assist clients with the local regulatory challenges any development project faces in the Delaware Valley region, and with the process of competing for support at the political and economic development nonprofit levels.
Everyone who does business in the city of Philadelphia – whether or not they have offices or permanent employees there – needs to be aware of Philadelphia’s local business taxes, and the strategies available for reducing their potentially negative impact. We are regularly engaged in working through audit and non-filing issues on city taxes, as well as with similar taxes in suburban townships. Because these taxes do not conform to federal tax timing and income recognition rules, they can present an unwelcome surprise to unwary businesspeople.
For several years, we have maintained a regular program supporting our clients in challenging real estate tax assessments in Philadelphia and surrounding counties. This has never been a more significant issue than in the current environment, and ongoing local revenue needs ensure that it will continue to be an important battleground between businesses or wealthy families and tax collectors.
We advise clients on sales and use tax planning for their businesses, and represent them in connection with tax audits that the Pennsylvania Revenue Department conducts.
Our attorneys, are familiar with the tax rules governing tax advantaged investments that qualify for affordable housing tax credits, historic rehabilitation tax credits, and new markets tax credits, and with the business structures that provide solutions to satisfy the requirements of the tax rules.
Our clients have faced a wide range of tax planning opportunities and pitfalls. Representative projects in which our tax attorneys have recently engaged include:
We have long represented a number of tax-exempt organizations – from charities and social service agencies, to community development agencies and country clubs. Each of these has unique tax needs around issues such as:
Tax planning comes to the fore in structuring transactions. The most important aspect of our Tax Practice is working side by side with business lawyers, clients, and accountants to make certain the clients’ transactions are tax-efficient.