Episode 62

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Published on:

11th Mar 2023

A Conversation with Timothy P. Noonan, Partner and Tax Residency Practice Leader at Hodgson Russ LLP

In this episode of the SALTovation podcast, Stacey Roberts is joined by Tim Noonan, Tax Lawyer and Partner at Hodgson Russ in New York, to discuss state and local tax issues. They talk about tax and legal issues related to private equity firms targeting certain companies and the importance of understanding where the target companies operate to determine any filing obligations. Stacey and Timothy also discuss the 2018 Wayfair case, and why tax professionals need to be knowledgeable to help clients navigate the process within state and local jurisdictions. 

 

Topics discussed in this episode:

  • The need for expertise in transaction tax matters during big deals
  • What is the 2018 Wayfair case?
  • Tax implications of private equity and hedge fund transactions

 

What You Will Learn:

  • 2:10 State and Local Tax Considerations for Private Equity Firms
  • 8:07 Understanding Nexus and State Tax Implications for Business Transactions
  • 11:54 Residency Rules and Tax Audits in Different States




Quotables:

  • “State tax issues and private equity deals are an underrated issue. You and I think it's the most important issue because that's what we do every day. But we've gotten called in on both sides of these deals where someone's getting acquired and they haven't collected sales taxes in many years. We have to clean that up and figure out if your sales are taxable in this many states. We clean that up through voluntary disclosure.”- Timothy Noonan [04:22]
  • “With the Wayfair case in 2018, you now have all these sellers who might not be watching what happens at the Supreme Court level and don't realize that every state has come out and said if you have a certain amount of sales in the state, which isn't very high threshold, you should be collecting sales tax in 46 different states and thousands of local taxing jurisdictions. So that can be messy.”- Timothy Noonan [07:11]
  • “The rules in most states are either similar or the same. Someone leaving Colorado has the same residency test as someone leaving New York. There's a domicile test. California's rule is a little bit different, but they all sort of sound like the same concepts of this domicile test. So in that sense, the rules are the same.”- Timothy Noonan [12:02]
  • “A lot of wealth creation that happens for folks in the private equity world is through pieces of their target companies they acquire and then they sell again. It is carried interest. It is the piece of these companies that are treated as capital gain. It's intangible. So in addition to that capital gain benefit of carried interest, it has an important effect on state taxes too.“- Timothy Noonan [16:34]


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Production Support

This episode was produced with support from Truth Work Media. www.truthworkmedia.com

Mentioned in this episode:

Sales Tax Nerd

Are you a Sales Tax Nerd? Do you feel alone in your work? Do others understand what you deal with on a daily basis? Are you looking for your “people”? You need to check out The Sales Tax Nerd Community! It brings together helpful resources, ongoing training, and camaraderie. With free webinars, on-demand courses, and quarterly Office Hours with the original Sales Tax Nerd, Diane Yetter, you’re never short on accessible information and relief from the chaos of sales tax. Get your toughest questions answered by knowledgeable members of the community. Network with peers, access exclusive content, get discounts on our live courses, and gain over 28 CPE credits each year. Click the Sales Tax Institute link in the description, and use the code SALTOV10 for 10% off your membership today! https://www.salestaxinstitute.com/sales-tax-education/sales-tax-nerd-community-membership

Tax Nerd

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About the Podcast

SALTovation: Making Sense of State and Local Tax
Welcome to SALTovation. The SALTovation show is a podcast series featuring the leading voices in state and local tax (SALT). Here we talk about issues, strategies, and planning tools to help you make sense of SALT. Because, in SALT, there is no “one and done.” SALT is a puzzle of ever-changing pieces. Solving that puzzle is our business at SALTovation. Tens of thousands of listeners know they won't get tax talk as usual with the SALTovation team. Our team is known for straight-talk with a flair for fun, providing clarity and opinions that move businesses forward with confidence.

Attorney, CPA, speaker, and writer Judy Vorndran leads the SALTovation team as they go inside business to help deal with the daily operations and long-term strategies of making SALT less “taxing.” Judy has spent more than 25 years advocating for businesses with innovative strategies, renowned knowledge and experience. She has helped guide thousands of taxpayers across the nation and globally through the morass of SALT, freeing them to concentrate on growth. Joining Judy are the wickedly smart members of the SALTovation team, who have seen, worked with and tamed some of the most prickly issues in SALT. They enjoy sharing their stories and knowledge with listeners.

Solving the SALT puzzle doesn’t happen in a vacuum; it takes a community. So, we invite leaders in business and state and local tax to share their stories, challenges and successes on this show. Drop us a line at SALTovation.com if you'd like to join the conversation and tune into our regular series at TaxOps.com.