French Insider Podcast Episode 5: Understanding a Company’s Sales and Use Tax Liabilities in the U.S. with Justin Hepworth

08.02.2021

Taxes can be complicated. This is especially true in the United States, where not only is there a Federal tax system, but every state has its own tax system as well. Understanding your tax liabilities in the U.S. means understanding the intricacies of the tax system of each state you’re doing business in. How are tax liabilities assessed and what type of taxes can a French company doing business in the U.S. be subject to? In this episode, we’re providing a high-level view of what every French company should know about potential state tax liabilities in the U.S.  

Joining host Sarah Ben-Moussa is Justin Hepworth. Justin is a partner in the Tax and Estate Planning Practice Group in Sheppard Mullin’s Orange County office. His practice encompasses a broad range of state and local tax matters, from planning, compliance, and transactional matters to controversy matters in audit and through litigation. Justin regularly advises clients on state and local tax implications of restructurings, mergers, acquisitions, spinoffs, and asset sales. He advises on audit defense, voluntary disclosure, unclaimed property (escheat law), and other controversy and compliance matters. He has extensive experience handling a broad range of multistate issues, including nexus, sales and use tax exemptions, sourcing and characterization, research and development credits, unitary business matters, California Prop. 13 change in ownership issues, and residency planning and audits.

Sarah Ben-Moussa is an associate in the corporate practice group in Sheppard Mullin’s New York office and is a member of the Energy, Infrastructure and Project Finance team. As a member of the Sheppard Mullin French Desk, Sarah focuses her practice on domestic and cross-border mergers, acquisitions, joint ventures, project-level debt and equity financings of wind and solar facilities, and general corporate matters involving French and American companies. Before joining Sheppard Mullin, Sarah spent a year and a half studying and working in Paris.

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What We Discussed in This Episode

  • What type of state and local taxes might French companies doing business in the U.S. be subject to?
  • What is “nexus” and how does it impact a state’s ability to tax a company?
  • Can a company be subject to a state’s taxing system even with no physical presence in that state?
  • What type of activities establish economic nexus in a state so that tax liability is triggered?
  • What type of goods and services are subject to state taxes?
  • Why might it be important to track sales in every state that a company sells goods or services in?
  • How does the France-U.S. tax treaty affect tax liability at the state level?
  • Why it’s important to enlist the assistance of an accounting and/or law firm
  • What tax considerations exist in mergers and acquisitions?
  • What type of double taxation issues should a company be familiar with?

Resources Mentioned:

South Dakota v. Wayfair, Inc. (2018)

Contact Information

Justin Hepworth attorney profile 

Sarah Ben-Moussa – Sarah’s Sheppard Mullin attorney profile 

Sheppard Mullin French Desk: www.sheppardfrenchdesk.com

Co-Chair - Valérie Demont 

Co-Chair: Christine Hoefliger Hourcade - CHoefliger@sheppardmullin.com

Thank you for listening!

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Sheppard Mullin French Desk website

This podcast is for informational and educational purposes only. It is not to be construed as legal advice specific to your circumstances. If you need help with any legal matter, be sure to consult with an attorney regarding your specific needs.

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