Controlling-Interest Real Estate Transfer Taxes: The Potential State Tax Trap in Mergers and Acquisitionsby Michele Randall and Joseph Gurney, Deloitte Tax LLP |
As merger and acquisition activity appears once again on the upswing in the U.S., the imposition of state and local real estate transfer taxes on these transactions remains a significant yet potentially overlooked cost. Because corporate mergers and acquisitions generally do not involve direct, deed-effected transfers of real property, there is often a misconception that real estate transfer taxes do not apply. However, depending on the law of the applicable taxing jurisdiction, a merger or other change in control of a legal entity can result in imposition of these taxes in the same way as the outright sale of a company’s real estate assets.
This article by Michele Randall and Joseph Gurney, directors with Deloitte Tax LLP Multistate Practice, provides an overview of the various state taxing regimes that impose controlling-interest transfer taxes, highlights some of the nuances of each state’s rules, provides some common pitfalls associated with such taxes, and describes emerging trends.
Controlling-Interest Real Estate Transfer Taxes: The Potential State Tax Trap in Mergers and Acquisitions
(324.70 KB)
