Legal Blog

M & A Nuggets: Sales Tax On Acquisition

dollarsignDid you know that an acquisition structured as an asset purchase may result in substantial sales tax?  This is often an overlooked money issue in the negotiation process.  Many states levy a sales tax on the value of assets transferred in the sale of a business.  For example, in Maryland the sales tax rate is 6%.  In New York, the rate is 4%.  In the case of a business sale involving large machinery and equipment or heavy vehicles, the sales tax could be significant.  The exact assets that are taxed varies from state to state.  So, it is important to negotiate upfront how the purchase price is allocated to each of the assets and how the purchaser and the seller will share the payment of the sales tax.


Glenn D. Solomon Esq., is a principal at the law firm of Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years, with extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress 


Offit Kurman is one of the fastest-growing, full-service law firms in the Mid-Atlantic region. With 120 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our eight offices serve individual and corporate clients in the Maryland, Delaware, New Jersey, and Northern Virginia markets, as well as the Washington DC, Baltimore, Philadelphia, and New York City metropolitan areas. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect. You can also connect with Offit Kurman via Facebook, Twitter, Google+, YouTube, and LinkedIn.