Tax Strategies for Weathering the Economic Storm

Economic downturns spur the tax departments of both states and businesses to action. At the same time that states are searching for ways to supplement their declining tax revenues, businesses are formulating strategies to improve their profitability by reducing their tax liabilities. Businesses often focus on sales and property taxes to reduce their overall tax payments, but in a poor economy companies also must prepare themselves to deal with states' more aggressive pursuit of sales tax revenues. On the positive side, many businesses--and not only manufacturers--can take advantage of external obsolescence caused by the economic crunch to reduce the assessed value of their property and, in turn, their property taxes.