Individuals and business face myriad regulations specific to state and local tax laws in Georgia, in other states, or in multiple states. Count on Litwin Law’s more than 30 years of experience mitigating risk and reaching favorable resolutions for clients with state and local tax law issues. Here’s a sampling of state and local tax law issues Litwin Law has resolved or litigated on behalf of individual and business clients.
Responsible Person (Trust Fund) Liability
Obtained withdrawal of a $10 million assessment issued against the managing member of a limited liability company (LLC) that owned a chain of franchised restaurants, by convincing the state taxing agency that the relevant statute under which the assessment was issued applied to officers and employees of corporations but not to members, managers and employees of LLCs.
Responsible Person (Trust Fund) Liability
Obtained $3.87 million reduction of personal liability asserted by state taxing agency (1) for unremitted taxes, penalties and interest exceeding $4.5 million and (2) issued against a member of several different LLCs that each owned a separate hotel in a U.S. metropolitan area.
Nonresident Withholding Taxes (Pass-Through Entities)
Represented manufacturer/distributor of accessories in protesting $4.99 million assessment for nonresident withholding taxes, penalties, and interest, covering 1998-2006; negotiated for reduced payment of $181,000.
Sales Tax Contractors that Fabricate Own Items for Projects
Represented contractor that fabricates products for installation, as a subcontractor, at construction projects, in challenging assessment of more than $900,000 in sales tax, and reduced the total liability to approximately $35,000.
Corporation Business Tax Litigation for Major Airline
During litigation, obtained $242,000 concession from a state taxing agency regarding the computation of tax on capital, after convincing the agency that the airline’s account for “deferred federal and state taxes” are not taxable “surplus reserves.”
Ad Valorem Property Tax
Represented owner of commercial property before county taxing authority to obtain reduction for three years in value of property, from $1.795M to $930,000.
State Tax Collections
Negotiated for, and entered into agreements with, various taxing agencies for repayment of collected trust fund taxes (employer withholding taxes, nonresident withholding taxes, and sales taxes) for distributors, retailers and other businesses, and obtained favorable waiver of statutorily-imposed criminal and civil penalties.
State Tax Executions
Obtained withdrawals of state tax executions issued against businesses and individuals, resulting in savings of hundreds of thousands of dollars, after finding defects in the issuance of the tax executions not in compliance with proper tax procedure, including the tax agency’s withdrawal of state tax executions (1) asserting liability of over $163,000, (2) issued against the former responsible person of a business, (3) but found to be void after agreeing that the agency had failed to follow correct tax procedure in issuing the executions.
Airline Apportionment Case
Represented major airline in negotiating for reduction of asserted liability following audit from which the taxing agency claimed that nontraditional revenues from marketing campaigns should be included in the sales factor of the apportionment formula unique to airlines and limited to “revenue from hauling passengers, freight, mail and excess baggage.”
Responsible Person (Trust Fund) Liability
Through settlement during litigation, obtained reduction of personal liability assessment (1) for unremitted taxes, penalties, and interest exceeding $300,000 and (2) issued against investor in restaurant/bar.
Responsible Person (Trust Fund) Liability
Through settlement reached during litigation, obtained reduction to $15,000 of personal liability assessment exceeding $280,000 (1) for unremitted taxes, penalties and interest and (2) issued against investor in restaurant/bar.
Refund of Local Taxes
Through settlement reached during litigation with city, obtained refund of $187,000 in 9-1-1 charges paid in error by large telecom company, plus interest of $32,800.
Multistate Tax Planning
Advised manufacturer in the poultry processing industry of state tax planning and nexus issues arising from operations in several states.
Responsible Person Liability
Court granted motion for summary judgment ruling that officer in a retail business was not liable personally for unpaid trust fund taxes, because the officer, who signed some checks and was present at the store on occasion, did not make day-to-day decisions about the operations of the business.
Sale of Services vs. Sale of Tangible Personal Property
State taxing agency issued Official Assessment and then State Tax Execution after denying the taxpayer’s protest of Notice of Proposed Assessment. By showing that taxpayer, a service provider that transferred tangible personal property as part of its service, was, in fact, selling nontaxable services, and not taxable tangible personal property, obtained a favorable settlement during litigation, and settlement resulted in a large reduction in taxpayer’s liability.
Multistate Voluntary Disclosures for Several Large Companies
Filed voluntary disclosures to report and pay corporate income, franchise, and sales and use taxes for companies with nexus in several states. These filings resulted in savings of hundreds of thousands of dollars in back income and franchise taxes and uncollected sales taxes.
Worker Classification in Georgia Department of Labor Cases
Tried cases resulting in several rulings finding that businesses, including a logistics company and a staffing company, were not engaged in employment of workers and therefore not liable for unemployment insurance taxes.
Sales Taxes on Nontraditional Lodging
Obtained favorable settlement at the administrative level on uncollected sales taxes on charges for rentals of homes and condominiums.
Sales Tax on Prepared Food
Litigated and settled case arising from assessment of uncollected sales taxes on retail sales of products that the taxing agency considered “prepared food” and not eligible for food exemption from sales tax.
Packaging – Freeport Exemption
For a manufacturing company whose product is provided through an aerosol can, obtained a favorable ruling from Cobb County Board of Equalization that items used to package the product qualify for the Freeport exemption (as product changed during the manufacturing process) because the items become part of the product (paint dispensed through aerosol cans) and are not ineligible packaging materials.