State and Local Indirect Tax Services Contents State income tax ..................................2 SALT transactions ................................2 Global location investment, credits and incentives...........................3 Property tax ........................................4 Unclaimed property and escheat services ............................4 Sales and use tax (SUT) ........................4 VAT .....................................................6 Global trade .........................................6 Excise tax ............................................7 License compliance services .................7 Employment tax ...................................9 WOTC ................................................10 ACA ...................................................10 Talent operate ....................................11 State tax policy ..................................12 State desk network ............................12 Indirect tax and state and local tax Indirect taxes often represent a company’s largest tax obligation — and they are continuing to rise across the globe. These taxes are broad in scope and affect multiple business units in an organization. Indirect taxes can have significant impact on the financial and risk profile of your business, which makes it important to consider them as part of your overall tax strategy. Ernst & Young LLP (EY US) can help you gain insight into your overall indirect tax burden with an eye toward identifying areas of potential risk and opportunity. This forward-looking approach is aimed at helping manage the overall indirect tax burden and supports the increasingly strategic role of tax and finance in today’s business environment. Our diverse and experienced team of subject-matter professionals is supported by industry-leading technology tools and methodologies. About EY State and Local and Indirect Taxes Americas Indirect Tax Americas Indirect Tax More than serves nearly Symposium 1,500 90% 159 Americas Indirect Tax of Fortune 100 attendees with 70 from 16 professionals companies foreign countries Global tax platform: State desk network EY GTP Indirect Tax with invaluable grassroots Indirect — globally connected knowledge in every US technology platform harnessing state jurisdiction one set of client data to address multiple indirect tax issues December 2019 | 1 EY State and Local and Indirect Tax Services State income tax SALT transactions Today’s tax departments increasingly face resource constraints and Risk and opportunity are both constants in the world of transactions. the demands of keeping up with ever-changing state income tax Whether you are seeking to grow your business through an laws. As a result, a business’s limited resources may be prohibiting acquisition or streamline your operations through a divestiture, tax departments from reaching their desired goals. Our focus is there are myriad tax considerations that can have a significant on helping businesses identify ways to manage effective tax rates impact on your finances and reputation. At every point along the (ETR), improve cash flow and reduce risk. Our state income tax transaction timeline, attention to risk and opportunity constraints professionals can: can make the difference between a successful transaction and one with less-than-optimal results. • Review filing methodologies to identify potential refunds and risks • Answer questions throughout the tax accounting, compliance and Our services focus on income/franchise and the indirect tax controversy processes aspects of tax due diligence and structuring, bankruptcy and restructurings, as well as pre- and post-transaction integrations. • Assist with the complicated process of identifying tax positions, In addition, our team of professionals has significant experience assessing the associated risk and measuring the benefit with disparities between state and local tax laws and the Internal • Provide guidance on new state tax policy and legislation, advise Revenue Code, such as attribute limitations, stock basis and on the tax return impact of those changes and team to help earnings and profits, debt planning, and many others. prepare returns We serve both complex corporate and private equity clients. • Help businesses address the complex and time-consuming task of communicating with state and local tax authorities • Assist with state tax audits and mitigation of audit assessments 2 | Indirect Tax Services Global location investment, credits and incentives US tax reform, developments in global trade and the onset of Tax credits are generated by business activity such as employment numerous large-scale and well-publicized economic development changes, research and development, capital investments and training. projects have disrupted the status quo for businesses and They are available at the federal, state, local and global levels. governments. Businesses are asked to find ways to meet the Our globally integrated incentives practice has developed a challenges impacting their operations and discover commercial streamlined process for information collection and credit calculation opportunity amid this disruption. Meanwhile, governments must to assist businesses in identifying and capturing current, future and evaluate how to maintain revenue and attract investment in retroactive credits that may be available. their communities. Our global location investment, credits and incentives services are focused on helping businesses address Available credit opportunities include: disruption and identify potential opportunities. • Work Opportunity Tax Credits Location advisory starts with the selection of a site. Determining • Federal Empowerment Zone Credits the most suitable location is critical to a successful project and • Global tax credits can have lasting impact on an organization’s operations. • State point-of-hire tax credits We work with multinational businesses to assist them in identifying • State research and development credits the most suitable locations and available credits and incentives. We work with governments to help secure incentives, assist • State investment tax credits businesses in completing required compliance documentation, • State training and employment tax credits and provide audit support. • Hurricane Disaster Zone Employee Retention Credit Our location investment services include: • Wildfire Area Tax Credit • Location advisory and site selection • Tax modeling • Cost modeling • Supply chain analysis • Location analysis • Economic impact studies • Domestic state and local discretionary incentives • Global incentives • New markets tax credits • Discretionary federal grants • Tax increment financing • Investments in tax credits • Low-income tax credit due diligence • Renewable energy credits • Opportunity zones December 2019 | 3 Property tax Unclaimed property and escheat services Business property taxes account for 38.9% of the total state and Property that is unclaimed for a prescribed period of time reverts, local tax burden for the average business.* In the US, more than or escheats, back to the state. No organization is immune from 13,000 tax jurisdictions assess and collect property taxes annually, generating unclaimed property (UP), nor exempt from reporting making the property tax function both burdensome and complex. UP. We offer a full suite of UP services in the areas of advisory, Additionally, state and local governments are often dependent compliance and asset recovery, all of which can add value, increase on property taxes to provide operational funding. Unfortunately, efficiency, mitigate risk and potentially decrease cost. an assessor’s ability to model an asset’s fair market value often suffers from limited resources, leaving businesses to determine Sales and use tax (SUT) whether the assessments are fair. While sales and use taxes are often viewed as less complex than When property taxes are well managed, they can be the largest other indirect taxes, they are among the most cumbersome to controllable component of a company’s tax liability making it manage. The sheer volume of these transactional taxes, coupled important to stay informed and take a proactive approach. with the ever-changing regulatory environment, creates stress on internal resources to keep up, much less focus on high-value Our services range from tax department process review and priorities of the business. Adding to these challenges are required technology transformation to full tax process outsourcing, process and system changes, which may be further complicated by enabling businesses to focus on strategy rather than repetitive, acquisitions and ongoing integration projects. compliance-focused tasks. Our service offerings are customizable based on specific business objectives: Whether your concerns are centered on legislative, compliance, refund opportunities or technology-related matters, our SUT • Compliance return network can help your business navigate the complexity. Our • Rendition advisory team of more than 175 professionals located across the country • Embedded intangible cost reviews has deep subject-matter experience combined with industry-specific compliance and advisory knowledge. Our SUT services include: • Abatement, exemption and incentive reviews • Sales and use tax recovery services • Ghost asset identification and analysis • Sales and use tax structuring assessment • Obsolescence studies • Risk assessment and mitigation • Assessment reviews • Sales and use tax systems and process review • Appeals support • Sales and use