Practice Areas & Industries:

Practice/Industry Group Overview

Baker & Daniels' state tax team is nationally known for its work in reducing the tax burdens of Indiana, multi-state and multi-national business clients. The Team takes a practical approach, often combining and coordinating tax planning strategies with administrative and legislative solutions to fit the client's needs. The State Tax Team currently includes seven attorneys who devote nearly all of their time to state tax matters for business clients. Collectively, they have over 100 years experience. Several Team members have over 25 years experience in the state tax area. They are well known by assessing, tax and government officials at all levels, an important factor when selecting state tax advisors. Two experienced real estate analysts on the Team also provide field support on real estate assessment matters.

The accessibility of our experienced professionals to the client's in-house tax professionals is one reason we are selected by many companies as their state tax advisers. Our work for the Company will not simply be done by "staff" personnel. Seasoned Baker & Daniels professionals will be available to respond promptly to your requests and perform what needs to be done.

Our state tax clients are in all lines of business, e.g., steel, pharmaceuticals, automotive, chemicals, construction, medical device, oil and gas, utilities, consumer products, agriculture, printing, real estate development, high tech service providers such as financial, institutions, insurance companies and healthcare concerns. Clients also include industry and business associations.

For some clients, we have instituted regularly scheduled "updates," i.e., presentations to in-house tax professionals about recent developments in tax law. These sessions enable the client to respond quickly to changes in the law and to remain current about tax savings opportunities as they develop.

The Team relies heavily on technology and is very active in a number of nationally recognized state tax organizations. The Team also tries to use as much of the client's own tax department resources as possible (to minimize cost), particularly on tax savings strategies and restructurings.

Baker & Daniels has a long tradition of excellence in the state and local tax area. As far back as the 1920s, our lawyers have been leaders in this area, several actually writing key provisions of Indiana tax law, including the gross income tax and the sales and use tax. We have also tackled many difficult tax issues for our clients. Our reputation has grown nationally and we are frequently called upon by companies across the country.

Members of the Team regularly appear as speakers at national seminars on state and local taxation. One member of the Team is a continuing contributor to the ABA Journal on State and Local Taxation and authors regular updates for the national Committee on State Taxation (COST). Another member is the Indiana contributing author to the ABA Property Tax Deskbook and is a frequent speaker at national meetings of the Institute of Professionals in Taxation (IPT) and at the Annual Client Seminars of the American Property Tax Counsel, of which the firm is a founding member.

Services Available

Sales and Use Tax

In the sales and use tax area, the Team has and can perform the following work:

• Self assessments: Determination of whether the company is properly reporting sales/use tax, focusing particularly on those areas frequently misunderstood, including production equipment, transportation equipment, utilities, real estate improvement contracts, and software.
• Review of reporting and compliance procedures and record retention practices.
• Nexus studies: Determination of whether the company is registered properly with the states and, if not, minimizing exposure.
• Assessment appeals: Management of the audit, administrative appeals, and, if necessary, litigation.
• Sales tax planning: minimization strategies for sales/use tax.

Income Tax

State income tax planning requires knowledge of the variations in nexus standards, apportionment, and classification of income from state to state. It also requires selection of the most advantageous business form and the best overall tax strategy. We have extensive experience in working with multi state and multi national companies on state income tax planning and minimization.

We are also well-versed in appeals work and represent taxpayers before revenue departments and tax courts on state income tax issues. Many of our clients involve us at the audit level (sometimes behind the scenes) where problems can be "headed off." We are also able to respond quickly to client inquiries regarding the state income tax consequences of planned transactions and reporting positions.

Real Estate Tax

Unlike the vast majority of states that assess real estate on a market value basis, Indiana assesses real estate using a modified reproduction cost method. This requires a deep working knowledge of the regulations that comes only from experience. Through many years of practice, our attorneys possess the most comprehensive information available for comparable purposes and understand the likely pitfalls of the assessing process. Our attorneys have litigated real estate tax disputes before the Indiana Tax Court, the Indiana Court of Appeals and the Indiana Supreme Court.

Our real estate tax clients include many large manufacturing, industrial and utility concerns as well as major national real estate developers. Finding the best result for our clients has included seeking solutions through the legislative process, pursuing exemption eligibility and coordinating with the Indiana Department of Commerce to secure tax abatements or other economic incentives offered by the State of Indiana.

For our clients with real estate interests outside of Indiana, we have provided national real estate tax management in conjunction with our affiliation for American Property Tax Counsel ("APTC"). APTC is a network of leading independent property tax law firms throughout the United States. APTC capitalizes on the local relationships and knowledge of the member firms to secure the best result for our clients.

Personal Property Tax

The State Tax Team has extensive experience in reducing the personal property tax burdens faced by our clients. Indiana's personal property tax system is fraught with traps for the unwary and frequently clients ask us to review their reporting to assure all exemptions, deductions and credits are being correctly claimed. We also consult with businesses on personal property tax planning ideas and are currently working with a national accounting firm on a personal property tax minimization program for a mutual client. (We pride ourselves on our ability to work effectively with the clients' tax department, as well as its other outside consultants, to achieve the clients' goals in the most cost-effective manner.)

Tax Incentives

The Team regularly represents businesses seeking tax incentives from state and local governments. We have extensive experience with tax abatement, enterprise zones, and research and development incentives - just to name a few of the incentives all companies should explore. We are certainly well-suited to consult with the Company on these opportunities.