Tailored State Tax Planning for Entity Structuring and Deals
Our firm helps businesses navigate multistate tax exposure as they expand across borders. We advise on franchise tax bases, combined reporting, and available credits to optimize your effective tax rate. The Wilson Firm’s attorneys identify sales/use tax risks for services, SaaS, and drop shipments, and ensure exemption certificates are properly managed. We build contract terms that clarify tax collection, remittance, and reporting obligations to keep your deals clean and compliant.
What is State Tax Planning?
State tax planning helps businesses and individuals manage tax exposure across jurisdictions, especially during growth, restructuring, or cross-border transactions. It ensures compliance while optimizing tax outcomes based on where and how you operate.
Key Focus Areas:
- Franchise and margin tax analysis.
- Sales/use tax exposure for services, SaaS, and asset transfers.
- Nexus and apportionment across multiple states.
- Exemption certificate management and audit readiness.
- Credits, incentives, and filing requirements.
- Contract terms for tax collection, remittance, and reporting.
Effective state tax planning aligns your operations with local rules, reduces risk, and supports long-term financial efficiency.
Why State Tax Planning Matters?
State tax planning helps businesses stay compliant, reduce risk, and manage costs as they grow across jurisdictions. It’s essential for structuring deals, managing operations, and avoiding penalties tied to multistate activity.
Key Benefits:
- Avoids unexpected liabilities from nexus, apportionment, and filing gaps.
- Improves cash flow by identifying credits, incentives, and timing strategies.
- Clarifies sales/use tax exposure for services, SaaS, and asset transfers.
- Supports clean contracts with tax terms for collection, remittance, and reporting.
- Prepares for audits with organized exemption certificates and documentation.
Strategic state tax planning keeps your business agile, compliant, and positioned for sustainable growth.
How The Wilson Firm Helps with State Tax Planning
We advise businesses and individuals on multistate tax exposure, including franchise tax bases, sales/use tax obligations, and nexus risks. Our attorneys review contracts for tax collection and reporting terms and help organize exemption certificates to support audit readiness. We assist with apportionment analysis and filing strategies that reflect current operations and growth. Every recommendation is based on applicable statutes and tailored to the client's transactional footprint.
Case Example
In the 2013 Texas Supreme Court case Combs v. Roark Amusement & Vending, L.P., the court ruled that receipts from coin-operated machines located outside Texas could be apportioned out-of-state for franchise tax purposes, reducing the company's Texas tax liability. Roark Amusement, a Texas-based firm, successfully argued that sales should be sourced based on the machines' location rather than the company's headquarters, minimizing its franchise tax through proper apportionment. This decision allowed the company to restructure its reporting, saving significant taxes on multi-state operations. Law firms specializing in state tax planning assisted similar businesses in adopting this strategy to optimize franchise tax obligations. The case highlights how effective apportionment planning can legally reduce state tax burdens for Texas companies with interstate activities.
Frequently Asked Questions
Nexus is the connection that subjects a business to a state’s taxes (income/franchise, sales/use). It can arise from physical presence (employees, inventory, offices) or economic thresholds (Wayfair-style revenue/transaction counts).
Most states use sales-only or three-factor (sales, payroll, property) formulas. Knowing how receipts are sourced (market-based vs. cost-of-performance) is critical to modeling your effective tax rate.
Sales tax is collected by the seller on taxable sales; use tax is self-assessed by the buyer when sales tax wasn’t charged. Businesses should track purchases and accrue use tax to avoid audit exposure.
Some states require related entities to file together, combining income and factors. Depending on your structure and intercompany activity, combined reporting can increase or decrease your burden, model both ways.
Remote staff, in-state contractors, or stored inventory (including with fulfillment providers) can establish nexus. Review HR, logistics, and 3PL arrangements regularly to confirm registration and collection duties.
