ReedSm R mith State e Tax Pr ractice S tate Ta ax Team m Lee - - PDF document

r e e d s m i t h . c o m State Tax 2017

ReedSmith

State Tax Practice Exceptional Experience

Reed Smith’s State Tax Practice has more professionals exclusively focused on state tax issues than any other U.S. law firm. Devoted to the full range of state tax matters, we do more than address individual issues as they arise. Our emphasis is on building strong client relationships, so we work to create comprehensive solutions that enable our clients to focus

• n moving ahead. This has resulted in our representation of more than 10 percent of the

Fortune 500 companies in state tax matters, and recognition by tax and business

• rganizations, including The Wall Street Journal.

Reed Smith’s state tax lawyers serve clients by leveraging a national platform with deep tax technical and industry experience. Our lawyers have diverse backgrounds, allowing us to understand more about our clients and their needs, and not solely the laws impacting them. This depth and breadth of knowledge impacts how we address client issues – balancing the law against the economic, business, and social environments in which our clients work every day.

Scope of Services

Our services include not only traditional legal services of audit defense and appeals – litigating from the earliest of administrative levels all the way through to the United States Supreme Court – but also nearly all areas of tax consulting.

Controversy & Litigation. Our controversy and litigation work encompasses all states and

all taxes, with particular emphasis in income/franchise tax, sales/use tax, real/personal property tax, and gross receipts taxes, such as the Texas Margins Tax and Washington B&O, and Unclaimed Property. We assist clients with state tax controversies at the audit level, and represent clients at all administrative levels, federal and state courts, including the United States Supreme Court. Because we understand that it is more cost effective for clients to conclude a matter as early as possible in the controversy process, we work diligently to achieve favorable settlement. As needed, we will defend clients through all judicial levels until

• ur clients’ goals are met. Representative matters are listed at the end and highlighted

throughout this brochure.

Tax Consulting. Our consulting work mirrors the subject-matter experience of our

controversy and litigation work. Our ability to deliver consulting work differentiates our services from many other law firms. Our services include:



Performing multistate tax refund reviews



Modeling multistate impact of changing tax laws and business facts

For more information about

• ur group, please visit

www.reedsmith.com/state tax/ or contact: Lee A. Zoeller, Partner Practice Group Leader +1 215 851 8850 lzoeller@reedsmith.com

Reed Smith Offices:

 Abu Dhabi  Athens  Beijing  Century City  Chicago  Dubai  Frankfurt  Hong Kong  Houston  Kazakhstan  London  Los Angeles  Munich  New York  Paris  Philadelphia  Pittsburgh  Princeton  Richmond  San Francisco  Shanghai  Silicon Valley  Singapore  Tysons  Washington, D.C.  Wilmington

r e e d s m i t h . c o m State Tax 2017

ReedSmith

State Tax Practice



Developing and implementing state tax minimization strategies for transactional activity or general tax liabilities



Conducting and documenting FIN 48 reviews



Monitoring and advocating legislative, regulatory and other legal developments



Drafting legislation and regulations



Identifying, negotiating and implementing credits and incentives



Developing unclaimed property reporting positions



Developing compliance programs



Executing voluntary disclosure initiatives



Obtaining ad valorem tax exemptions, including through appeal



Assisting with public relations issues resulting from tax matters

Recognized Leaders and Diverse Perspectives

Because we remain on the cutting edge of developments and changes in state tax, we are regularly recognized by legal and business communities, hold leadership positions in leading state tax organizations, and are sought out to speak at local and national tax seminars and conferences.

Legal/Business Recognitions. Our experience has been highlighted by Legal 500, The

Wall Street Journal, Forbes, NetworkWorld, E-Commerce Times, The Hartford Courant, State Tax Notes and BusinessWeek.

Leadership Positions. We serve in leadership positions for the Institute for Professionals

in Taxation, Taxpayers’ Federation of Illinois, the State Income Tax Monitor, and the Journal

• f Multistate Taxation.

Speaking Engagements. Our attorneys are regularly invited speakers at national and

regional conferences and seminars, such as those hosted by the Council on State Taxation, Tax Executives Institute, and Institute for Professionals in Taxation, as well as local conferences such as those hosted by the Chicago Tax Club.

• Perspectives. The diverse perspectives of our attorneys bring the optimal mix of sharp legal

skills and practical know-how to every client relationship and engagement. Our attorneys bring experience from industry, government, the Big 4 accounting firms, and in-house positions, with years of litigation experience at all levels of appeal, from administrative proceedings to the United States Supreme Court. In government, we have held the following key positions: Chief

Success Stories

Rare Victories for Intangible Holding Company Structures: Prevailed in resolving numerous cases involving the intangible holding company of a major nationwide retailer and

• entities. Similarly helped

several clients facing tax exposures of tens of millions of dollars in New Jersey in a dispute involving intangible holding companies. Record Settlements for Industry and Individuals: Obtained the largest income tax refund settlement for a bank taxpayer; large settlements for a pharmaceutical company in Illinois; some

• f the largest oil and gas

company cases to come before the California Franchise Tax Board; and helped settle the largest personal income tax residency case.

r e e d s m i t h . c o m State Tax 2017

ReedSmith

State Tax Practice

Counsel, California Franchise Tax Board; General Counsel, Illinois Department of Revenue; Deputy Commissioner of Revenue, State of Alaska; Acting and Deputy Chief, Illinois Attorney General’s Revenue Litigation Division; Legal Counsel to a California State Board of Equalization board member; and Deputy Commissioner and Taxpayer Rights Advocate, New York State Department of Taxation and Finance.

Serving Clients

When we earn the privilege to help our clients, we approach each engagement with great

• care. We assign attorneys with the right skill sets to each engagement, immerse ourselves in
• ur clients’ facts and circumstances, and deliver our work product using technology to be cost-

effective, efficient, transparent and responsive.

Fee Flexibility & Cost Savings. Our practice offers a flexible approach to billing and fees.

We have the ability to structure matters based on contingency-based billing, risk-sharing agreements, and other arrangements tailored to meet client needs and internal corporate policies.

National Platform. Reed Smith has the largest number of dedicated state tax attorneys in

any law firm, with our attorneys located in offices across the United States. The location and experience of our team allows us to coordinate state tax issues and advise on a national level to help clients avoid decisions made in one jurisdiction, from having unintended tax consequences in other jurisdictions.

Tax Intelligence. The size of our team allows us to track local developments across the

country, even though several states do not publish their tax practices and policies. Through

• ur Tax Intelligence system, we track key issues state-by-state. Our team has collected more

than 7,000 records that are not readily available through commercial sources, including case filings, unreported decisions and other key documents. Knowing these developments in advance allows us to bring opportunities to our clients earlier than other service providers.

Seamless Information-Sharing & Efficiency Through Technology.



• uRSite. Our client-specific extranet site, ouRSite, is a free service that we offer to any

client, for any matter, providing 100 percent real-time access to documents related to their

• matters. Clients also have the ability to add documents to the site, initiate conversations,

and post issues for the team to consider. An ouRSite portal does not eliminate the personal communication between our lawyers and clients; it simply enhances the agility of the client/lawyer team by creating the visibility to our work at the convenience of the client.

Success Stories

Legislative and Regulatory Guidance: Facilitated a meeting between a top New Jersey official and clients following passage of the state’s Business Tax Reform Act. The meeting provided the opportunity to gain valuable insight as to how the new act would be interpreted. We then helped position our clients advantageously under the new act. Nationwide Resolution: Developed and executed a 50-state resolution strategy for a Fortune 100 company in addressing state actions aimed at intangible holding

• companies. Strategy

eliminated nearly $100 million of potential tax exposure by participating in early voluntary compliance programs, pursuing amnesty

• pportunities, negotiating

favorable settlements, and assisting with analysis of Uncertain Tax Positions.

r e e d s m i t h . c o m State Tax 2017

ReedSmith

State Tax Practice



• DealBuilder. Our group has customized its DealBuilder technology to ensure our clients’

controversial matters are handled more efficiently, providing the advantage of quicker turnaround time and reduced costs. Our innovations to DealBuilder allow us to streamline form preparation and review through tailored data entry and storage. We enter client appeal information once and have the ability to generate accurate forms and filings for all levels of those appeals.

Public Relations. With every matter we take, our team is keenly aware of the importance of

preserving clients’ hard-earned goodwill with the public. We are experienced in achieving favorable and confidential settlements, including in nationwide matters involving hot-button disputes or other public tax issues, such as tax credits and incentives. Our attorneys are conscientious about media coverage and can create public relations strategies to minimize negative exposure and highlight success. We have advised the in-house media representatives of Fortune 50 companies as they interact with reporters from The Wall Street Journal, The New York Times and other media outlets.

Highlighted Tax Services

The following services are not representative of all tax consulting, controversy and litigation services provided by Reed Smith’s State Tax Practice, and highlight only a few of the services for which our clients engage us:

Controversy & Litigation. Reed Smith’s State Tax Group is recognized for its ability to

effectively litigate and win controversies. At the same time, we have an efficient approach to case management. For example, we have created a number of taxpayer coalitions to share the costs and burdens of litigation, including one coalition that funded the appeal of a taxpayer with sympathetic facts for the benefit of all taxpayers in the coalition.

Tax Refund Reviews. We have a record of success in obtaining significant cash refunds

and future tax savings using a contingency-fee structure, so that we take on the risk of failure and our clients incur no fees unless we succeed. Our Refund Review Program is performed for all state income/franchise tax returns, sales/use tax returns, and gross receipts taxes, such as the Texas Margins Tax and Washington B&O. Notwithstanding the ever-vigilant work of taxpayers to correctly report taxes and maximize tax savings for the company, opportunities always remain for tax savings. Our lawyers can identify positions based on case law, administrative policy, or legislative changes that may support a refund of taxes paid.

Sales/Use Taxation & Cloud Computing. Our attorneys have litigated cases and

handled refund claims involving cutting-edge sales tax issues, including the tax treatment of computer software, digital products, and telecommunications and other services. We have

Success Stories

Public Relations: Represented one of the 10 largest U.S. banks in a state tax case that received media attention. Working with the bank’s tax team, its general counsel office, and our public relations team, we

• btained subsequent

media coverage that was fair and balanced. Refund Reviews: Acted as national sales tax counsel for a major information services provider, obtaining significant refunds of tax paid on millions of dollars’ worth of software purchases.

r e e d s m i t h . c o m State Tax 2017

ReedSmith

State Tax Practice

been quoted in various business and tax publications as experts in this specialized tax arena, including by The Wall Street Journal. We work regularly with clients to evaluate sales tax refund opportunities as well as exposures on a nationwide basis, including exposures resulting from non-filing positions. Our attorneys then identify opportunities to reduce these exposures through the use of exemptions, negotiated credits and incentives, settlements, and voluntary disclosure agreements.

Mergers, Acquisitions & Transactions. Our team provides tax counsel for pre-and post-

transaction phases of buy or sells transactions, including due diligence assistance with transfer, sales/use, property, employment, and other taxes. We identify structural alternatives to minimize costs or enhance tax savings, and regulatory requirements that may affect closing

• terms. We also identify opportunities to reduce state tax exposures or obtain refunds, and

whether to do so before or after the transaction.

Credits & Incentives. Our team has experience in all phases of the credits-and-incentives

life cycle, and is called to discuss C&I issues at national and regional conferences. We have been involved in the identification of credits and incentives, contract negotiations, drafting tax credit agreements to maximize cash benefits and minimize risks – including public reputation risk – and implementing the C&I awards across corporate functions to ensure a successful audit of the award.

Representative Matters

The following cases represent a sampling of the industries, jurisdictions and appeal levels we have reached:



Appeal of Argonaut Group, Inc. (CA)



Coca Cola Co. v. Pennsylvania (PA)



Cutler v. Franchise Tax Board (CA)



Daniel V, Inc. v. Franchise Tax Board (CA)



Dial Corp. v. Director of Revenue (DE)



EDS v. Mississippi (MS)



Equipment Leasing & Finance Ass’n v. Director, Div. of Taxation (NJ)



First Union National Bank v. Pennsylvania (PA)



General Engines Co., Inc. v. Director,

• Div. of Taxation (NJ)



Hewlett-Packard Company v. Michigan (MI)



Microsoft Corp. v. Franchise Tax Board (CA)



Ohio Grocers Ass’n v. Levin (OH)

Success Stories

Sales/Use Taxation and Cloud Computing: Advised a major manufacturing company, which initially had decided against pursuing a tax issue that appeared to be relatively small. Our attorneys reviewed the company’s return and uncovered a larger issue. We took the claim to Pennsylvania’s administrative board and

• btained a decision that

resulted in substantial immediate and future savings. Groundbreaking Use of Offsetting Credits: Litigated a ground- breaking case establishing the affirmative duty of Pennsylvania auditors to find and allow credits as

• ffsets to any assessed

sales tax.

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Tax 2017

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