State and Local Tax Practice BakerHostetler s State and Local Tax team advises clients across the country with respect to complex state and local tax matters, including issues pertaining to income, sales and use, gross receipts, property (both real and personal), and a broad spectrum of other state and local taxes. We help clients in the single and multiple-jurisdiction context, and also assist clients with unclaimed property issues. We provide comprehensive legal services on all facets of state and local taxation, including: Transactional tax planning Dispute resolution and litigation Written guidance on tax issues Tax incentive negotiation Voluntary disclosures Unclaimed property issues Dispute Resolution Key Contact Edward J. Bernert Columbus ebernert@bakerlaw.com T 614.462.2687 When clients are involved in disputes with state and local taxing authorities, we work to resolve the matter by negotiating reductions in audit adjustments, negotiating settlements with taxing authorities, and when necessary, litigation. We are able to get favorable results for our clients by combining our extensive knowledge of the law with a willingness to negotiate with taxing authorities and a readiness to litigate, even to the state s highest courts if necessary. Our attorneys are especially effective, from the audit level through appeals, due to our strong working relationships with state departments of taxation and finance specifically in Ohio and New York, boards of tax appeals, and the appellate courts. Transactional Tax Planning We often advise businesses including publicly-traded and privately-held companies on the state and local tax implications of mergers, acquisitions, asset sales, and other transactions, and help them to develop creative and sophisticated tax planning ideas and solutions relating to the transaction. Moreover, we remain at the forefront of the use of limited liability companies, partnerships, joint ventures, and S corporations to own and operate business activities in a tax-efficient manner.
State and Local Tax Incentives We help clients obtain tax incentives from states and localities for making new investments or retaining employment levels in a state or locality. At the local level, we help clients make use of tax abatement opportunities and enterprise zones to promote new business investments and real estate developments. Not only do we negotiate the incentive agreements, but we also ensure that the state or locality has the authority to provide the promised benefit. We also help our clients analyze new or expanded business activities for state and local tax implications, such as potential issues pertaining to nexus. Unclaimed Property In the last 30 years, our seasoned team of legal advisors has been engaged to provide advice on nearly every facet of unclaimed property compliance across a broad variety of industries, with particular emphasis on the insurance and health care sectors. We have reviewed internal compliance, analyzed audit exposure, structured transactions and reorganizations, provided legal opinions, guided clients through voluntary disclosures, recommended compliance policies, and counseled businesses under audit. Whether advising on mitigating potential exposure or fighting unwarranted audits and assessments, our attorneys take a thoughtful and practical approach to unclaimed property challenges and seek to implement effective compliance strategies. We often supervise unclaimed property consulting firms to deliver the best outcomes for our clients, and our realistic, no-nonsense guidance helps businesses manage risk and address issues before they become problems. Representative Matters Tax Advice Prepare analyses of tax implications of providing services such as cloud computing services in multiple states; Examine nexus developments for clients and analyze exposure for additional state tax liability when clients expand their markets to new states; and Review contracts and consult on the documentation of transactions with an emphasis on sales, gross receipts, property and income tax implications. Dispute Resolution Negotiated $6.2 million refund of Ohio use tax for a manufacturer; Contested property values for a chain of restaurants in various communities for real estate tax purposes; 2
Significant experience in defending taxpayers in domicile and residency challenges in New York City and the states of New York and Ohio; Represented numerous clients in efforts by states to tax deferred income after the taxpayer has changed residency; and Significant audit defense consultation and representation before appellate review tribunals including administrative, trial court and appellate court proceedings. We have appeared frequently before courts at all levels, including the Ohio Supreme Court. Tax Incentives and Legislative Practice Represented numerous clients in securing tax and non-tax incentives from states and localities, including property, sales, and income tax benefits, as well as preferred financing and tax increment financing such as Ohio enterprise zone and community reinvestment area agreements and Illinois EDGE (income tax) agreements; and Drafted and lobbied amendments to state statutes to provide tax exemptions or other benefits such as amendments to assist in defending controversial audit issues. Tax Practice Overview For almost 100 years, the attorneys at BakerHostetler have helped clients effectively manage one of their most significant costs taxes by providing clients with sound and practical advice in federal, international, employee benefits, private wealth, tax exempt, and state and local tax matters. With more than 80 attorneys serving 14 offices, our tax practice is one of the legal profession's strongest. Clients rely on us for effective, pragmatic judgment and technical advice in structuring tax-efficient transactions, in arranging business operations to minimize compliance burdens and optimize tax synergies and efficiencies, and in handling federal, state and local tax controversies including litigation when necessary. Our international tax practice helps companies plan and implement global tax strategies around the world. We complement our planning and controversy practices with an active rulings practice, regularly obtaining private rulings on behalf of clients in complicated merger and acquisition transactions, joint ventures, spin-offs, accounting methods, and similar issues. Members of our team have served in senior positions at the Department of Treasury, the IRS, the Department of Justice, the Joint Committee on Taxation, and on Capitol Hill. Our tax attorneys also serve the academic community and the legal profession as adjunct professors, tax committee chairs, and officers of various tax 3
organizations. Twenty-four of our team members are listed in U.S. News & World Report s Best Lawyers, with four earning Lawyers of the Year awards. Our Tax team is also ranked in Chambers USA and in Who s Who in Legal in Corporate Tax. We understand that in tax law, facts matter. Our attorneys are committed to providing responsive service to our clients and to establishing the long-standing, deep client relationships necessary to enable us to command the facts necessary for effective counsel and representation in tax planning and controversy matters. 4
Key Members of BakerHostetler s Tax Team Edward J. Bernert Columbus Ted Bernert concentrates his practice in the area of state and local taxes with a particular emphasis on the major Ohio taxes affecting businesses and business owners sales and use, financial institution, personal income, commercial activity and real property taxes. He represents national companies concerning Ohio tax matters related to compliance, planning and tax legislation. Ted is Vice-Chairman of the American Bar Association s State and Local Tax Committee and is a past chair of the Ohio State Bar Association Taxation Committee and the Business Tax Committee of the Columbus Bar Association. Ted was appointed by the Governor to the Ohio Business Gateway Steering Committee to address the continued development of an electronic link for filing taxes and other matters affecting business. He also serves as a member of The Ohio Chamber of Commerce Taxation Committee. Ted is an adjunct professor of state and local taxes at the Capital University Law and Graduate Center and served as Chief Editor of Ohio Tax Review, formerly published by the Center. He currently serves as the co-editor of the Guidebook to Ohio Taxes, published by Commerce Clearing House. He has repeatedly been named an "Super Lawyer" in the area of Taxation and holds an AV rating by Martindale-Hubbell. Kelvin M. Lawrence Columbus Kelvin Lawrence represents business, individual and nonprofit clients in a variety of tax and transactional matters. His practice is principally focused on state and local tax counseling and controversies involving income, real property, sales, use, and commercial activity taxes. He has also advised clients on compliance and responding to audits pertaining to unclaimed property. Kelvin has experience in assisting clients with state residency audits and in seeking Private Letter Rulings from the Internal Revenue Service. He has worked with nonprofit entities to obtain real property tax exemptions, to maintain federal tax-exempt status and to improve corporate governance. Kelvin is currently the Chair of the Ohio State Bar Association Taxation Law Committee and is a former chair of the Columbus Bar Assocition Business Tax Committee. 5
Jeffry Erney Cleveland Jeff Erney s practice focuses on tax controversy and litigation. Jeff has had significant experience with handling taxpayer audits, administrative appeals, litigating tax cases, advising clients on prospective transactions and obtaining rulings and other technical guidance from the national office of the IRS. Jeff spent the first nine years of his legal career as a Senior Tax Attorney for Chief Counsel, Internal Revenue Service. For seven of those years, he was also counsel for the Utilities Industry Specialization Program. Jeff practiced for eight years as a tax controversy litigation partner with another major law firm. He also spent two years managing the IRS Practice & Procedure Group in the Cleveland, Akron/Canton and Toledo offices for one of the largest national accounting firms. Paul M. Schmidt Washington, D.C. Paul Schmidt, a former legislation counsel to the Joint Committee on Taxation, has extensive experience in corporate and international tax matters and has worked on all facets of taxation, from controversy to transactions to planning. Paul also has significant experience handling issues in connection with examinations by the Internal Revenue Service and frequently advises clients on issues raised by foreign tax authorities. Paul's practice includes representation of several FORTUNE 500 corporate clients in industrial, energy, and commodities businesses, as well as financial institutions in connection with international tax issues. He regularly advises private equity and hedge funds as well as publicly-traded partnerships and master limited partnerships ("MLPs") on tax matters and has unique knowledge of global taxable presence and transfer pricing issues facing funds. Paul regularly deals with tax issues in connection with the hospitality industry, including hotel groups, timeshare and fractional interests. He has considerable experience in hedging transactions and global hedging and trading centers. He also has worked extensively on tax issues associated with intellectual property, supply chain management, contract manufacturing, and structuring inbound and outbound global joint ventures. Paul chairs BakerHostetler s national Tax group and is the leader of the International Tax practice team. He is ranked in Chambers USA: America s Leading Lawyers for Business, is listed in The Best Lawyers in America and appears on the Washington, D.C. "Super Lawyers" list. Paul is the U.S. Vice Chair of the American Bar Association Tax Section Foreign Lawyers Forum and also a member of its Government Relations Committee and formerly served as the Chair of the AICPA International Taxation Technical Resource Panel. Paul is a Certified Public Accountant in Virginia and serves as an adjunct professor of law, teaching international tax at Georgetown University. 6
Christopher J. Swift Cleveland Chris Swift has more than thirty years of experience as a healthcare and tax lawyer who counsels the healthcare industry and other businesses by guiding them through governmental, tax, and regulatory issues. He keeps non-profit organizations taxexempt, assists all taxpayers in reducing state and local taxes and finds tax and regulatory incentives to grow companies. Chris has substantial experience in both the financial situations facing clients, as well as the particular concerns faced by clients in the healthcare industry. He finds practical solutions to problems and tax saving opportunities for clients. Chris currently serves both as a National Co-Leader of the firm s Healthcare Industry Team and as Coordinator of the Cleveland office's Tax, Personal Planning and Employee Benefits Group. He served as a member of the firm's Policy Committee from 2004 through 2009. He has been listed in The Best Lawyers in America since 1997 and was named a 2010 Cleveland "Tax Lawyer of the Year" and 2011 Cleveland "Healthcare Lawyer of the Year." Elizabeth Ann Smith New York Betsy Smith has a diverse tax practice, working in both transactional tax and controversy matters, with an emphasis in the hedge fund industry and in New York state residency and domicile cases. In addition, she has significant experience representing taxpayers before the IRS in the voluntary disclosure programs, as well as assisting clients with the new streamlined procedures and "opt outs." Betsy frequently advises on mergers and acquisitions, and also advises onshore and offshore investment managers regarding fund formation and strategic tax planning. She is responsive and engaged with her clients and truly understands their attitudes toward a matter, which allows her to determine the best strategy to employ in resolving their disputes. Betsy is a member of the firm's Policy Committee. Naomi Meisels New York Naomi Meisels is a seasoned tax attorney. She provides tax planning advice and performs tax controversy work for clients, developing creative solutions to reach her clients' ultimate goals. 7