State & Local Tax

Covington’s state and local tax practice has extensive experience with compliance and controversy issues for clients doing business in virtually all U.S. state and local jurisdictions. We regularly advise clients and help them navigate the myriad of state and local rules focused on the taxation of business income, employee wages, consumer and business personal property sales, and real property transfers.

State and local tax compliance issues have grown in importance over the last decade as sub-national tax regimes have been legislatively updated and judicially approved by U.S. courts to apply to remote taxpayers doing business with in-state consumers. We help our clients re-examine their historic state and local tax filing and reporting positions to evaluate and resolve potential new risk factors stemming from heightened enforcement efforts by state sub-national revenue departments and broader-reaching state and local taxation concepts.

Capabilities

• Advising on economic, bright-line, and telecommuting employee income tax nexus thresholds and filing requirements
• Evaluating business income tax apportionment methodologies for various revenue streams
• Reviewing positions on combined reporting and unitary business groupings
• Assisting with apportioning employee wages and withholding compliance
• Developing audit strategies and responses to state and local audit requests for information
• Preparing administrative appeals and negotiating with state and local revenue officials
• Conferring on coverage for state unemployment insurance contributions
• Addressing successor liability sales tax and real estate transfer tax issues in corporate transactions and restructurings
• Complying with non-wage tax withholding obligations by pass-through entities