Riveron's M&A Tax and Transaction Services experts have observed the latest changes and evolving trends related to< a href="https://riveron.com/posts/webinar-planning-for-unpredictable-tariff-and-trade/" target="_blank" rel="noopener noreferrer">US trade and tariff policies and have participated in several discussions on the potential impacts. One specific perspective to consider is how the policies will affect tax due diligence and transaction structuring. At a minimum, deal-makers should consider the following as a good place to start the conversation:
- Is the target companyincluding tariffs in the prices for
calculating sales and use tax liabilities and as part of property
tax valuations of inventory and other purchased
items?
- If not, has the target company received individual guidance, or has there been official guidance published by the states relevant to the target company?
- Is the target company a current beneficiary of tariffs, or is
it pursuing exemptions, reductions, or other exceptions to tariffs?
- The company should provide information as to the method of qualification and copies of relevant agreements.
- In addition, deal-makers should determine whether the agreements are legally transferable in the M&A situation.
- Are tariffs currently considered in existing transfer pricing
arrangements?
- Deal-makers should determine whether any analysis has been done regarding the effect of tariffs on these arrangements.
When tariffs make these goods more expensive, businesses may choose to pass the additional costs onto their customers. Consequently, it is crucial to understand how tariffs should be handled for sales and use tax purposes.
https://cm.wipfli.com/insights...The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
