Tax Allocation Clause Samples
The Tax Allocation clause defines how tax liabilities and responsibilities are distributed between the parties involved in an agreement. Typically, it specifies which party is responsible for paying certain taxes, such as sales, use, or transfer taxes, that may arise from the transaction. For example, in a business sale, the buyer might be responsible for transfer taxes while the seller covers income taxes related to the sale proceeds. This clause ensures clarity and prevents disputes by clearly assigning tax obligations, thereby reducing the risk of unexpected financial burdens for either party.
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Tax Allocation. Within thirty (30) days following the Closing, Buyer shall prepare or cause to be prepared and shall deliver to Seller a draft allocation of the Base Purchase Price as adjusted pursuant to Section 3.3, prepared in accordance with Section 1060 of the Code and the Treasury Regulations issued thereunder (and any similar provision of state, local or foreign law, as appropriate) (each such allocation, a “Purchase Price Allocation”). Within ten (10) days after the receipt of such draft Purchase Price Allocation, Seller will propose to Buyer in writing any objections or proposed changes to such draft Purchase Price Allocation (and in the event that no such changes are proposed in writing to Buyer within such time period, Seller will be deemed to have agreed to, and accepted, the Purchase Price Allocation). In the event of objections or proposed changes, Buyer and Seller will attempt in good faith to resolve any differences between them with respect to the Purchase Price Allocation, in accordance with requirements of Section 1060 of the Code, within ten (10) days after Buyer’s receipt of a timely written notice of objection or proposed changes from Seller. If Buyer and Seller are unable to resolve such differences within such time period, then any remaining disputed matters will be submitted to an independent accounting firm, the identity of which shall be agreed upon by Buyer and Seller each acting reasonably, for resolution. Promptly, but by no later than ten (10) days after submission to it of the dispute(s), the independent accounting firm will determine those matters in dispute and will render a written report as to the disputed matters and the resulting allocation, which report shall be conclusive and binding upon the Parties. The fees and expenses of the independent accounting firm in respect of such report shall be paid one-half by Buyer and one-half by Seller. Buyer and Seller shall report, act, and file in all respects and for all Tax purposes (including the filing of Internal Revenue Service Form 8594) in a manner consistent with such allocations set forth on the Purchase Price Allocation so finalized, and shall take no position for Tax purposes inconsistent therewith unless required to do so by applicable law. Buyer and Seller shall reasonably cooperate in the preparation, execution and filing and delivery of all documents, forms and other information as the other Party may reasonably request to assist in the preparation of any filings relating to the ...
Tax Allocation. (i) With respect to the Compression Group Entities and the assets of the Compression Group Entities, the Contributor Parties shall be allocated and bear all Taxes attributable to any Pre-Closing Tax Period and Acquiror shall be allocated and bear all Taxes attributable to any Tax period or portion thereof beginning after the Closing Date. The Contributor Parties shall defend, indemnify and hold Acquiror harmless from and against and be liable for all Liability arising out of or related to any and all Taxes (or the non-payment thereof) (1) of or with respect to the Compression Group Entities or the assets of the Compression Group Entities for all Pre-Closing Tax Periods, (2) attributable to any failure to comply with any covenant or agreement of the Contributor Parties (including any obligation to cause any of the Compression Group Entities to take, or refrain from taking, any action under this Agreement), (3) as a result of any Compression Group Entity (or any predecessor of any Compression Group Entity) being a member of an affiliated, consolidated, combined or unitary group prior to the Closing Date, including pursuant to Treasury Regulations Section 1.1502-6 or any analogous or similar state, local or foreign law or regulation, and (4) of any Person imposed on any of the Compression Group Entities for any period as a transferee or successor with respect to a transaction occurring before the Closing Date, by applicable Law, contract or otherwise; provided however, notwithstanding anything in this Agreement to the contrary, the Contributor Parties shall not be required to defend, indemnify or hold Acquiror harmless from or against or be liable for (x) Taxes that are included as a current liability in the calculation of Closing Date Net Working Capital, or (y) Transfer Taxes allocable to Acquiror pursuant to Section 5.12(c).
(ii) In the case of any Straddle Period, the amount of any Taxes based on or measured by income, gain, profits, receipts, employment, social security, payroll, sales, use, or other transaction-based Taxes of the Compression Group Entities for the portion of the Straddle Period ending on the Closing Date shall be determined based on a closing of the books as of the close of business on the Closing Date, and the amount of other Taxes of the Compression Group Entities for a Straddle Period that relates to the portion of the Straddle Period ending on the Closing Date shall be deemed to be the amount of such Tax for the entire taxable perio...
Tax Allocation. The parties hereto acknowledge and agree that the Merger Consideration and any other items properly treated as consideration for U.S. federal income Tax purposes shall be allocated among the assets of the Acquired Companies in accordance with Section 751 and Section 1060 of the Code and the Treasury Regulations promulgated thereunder (the “Allocation”). Within thirty (30) days after the Determination Date, Acquiror shall provide to the Holder Representative a draft Allocation, for the Holder Representative’s review and comment. The Holder Representative shall have sixty (60) days after receipt of the draft Allocation to propose any changes to Acquiror’s draft Allocation; provided, that if the Holder Representative does not notify Acquiror in writing of its proposed changes to Acquiror’s draft Allocation within such sixty (60) day period, the Holder Representative will be deemed to have accepted Acquiror’s draft Allocation, which shall be final and binding on the parties hereto. If the Holder Representative delivers to Acquiror its proposed changes to Acquiror’s draft Allocation within sixty (60) days after its receipt of such draft Allocation, Acquiror and the Holder Representative shall reasonably cooperate to promptly resolve any disputes with respect to ▇▇▇▇▇▇▇▇’s draft Allocation. If they are unable to resolve any such dispute within thirty (30) days after ▇▇▇▇▇▇▇▇’s receipt of the Holder Representative’s proposed changes to the Allocation, any remaining disputed items shall be submitted to the Independent Accountant who shall determine only those items in dispute. The Allocation agreed to by Acquiror and the Holder Representative or determined by the Independent Accountant shall become the final Allocation, and in the event there is an adjustment to the Merger Consideration after the final Allocation has been determined, the final Allocation shall be adjusted in accordance with the methodology set forth in this Section 8.2(g) to reflect such adjustment. The costs and expenses of the Independent Accountant in resolving any such dispute shall be borne equally by ▇▇▇▇▇▇▇▇ and the Holder Representative. The Holders and Acquiror shall, and shall cause their Affiliates to, report consistently with the final Allocation, as adjusted in accordance with this Section 8.2(g), on all Tax Returns, including IRS Form 8594 (in the case of Acquiror) and any statements required under Treasury Regulations Section 1.751-1(a)(3) (in the case of the Holders), and neither t...
Tax Allocation. The allocation of the Purchase Price for tax purposes shall be set forth in a statement prepared in accordance with Section 1060 of the Internal Revenue Code of 1986, as amended, which statement shall be prepared in a manner generally consistent with the form of Internal Revenue Service Form 8594 and a manner consistent with the Purchase Price allocation provided under Section 1.5. Buyer and Seller shall cooperate in the preparation of such statement of allocation and each party hereto shall file a copy of such statement as, and if, required by applicable law.
Tax Allocation. For federal, state, and local income tax purposes the income, gains, losses, deductions and credits of the Company, including the character and type thereof, shall be allocated among the Members in the same manner that each such item is allocated among the Capital Accounts
Tax Allocation. The Non-Income Taxes imposed on a periodic basis (including real, personal and intangible property Taxes or ad valorem property Taxes) (“Property Taxes”) for which Seller shall be and remain liable is the amount of Property Taxes (other than the Assumed Seller Taxes) assessed with respect to the ownership or operation of the Assets for (i) any Tax period ending prior to the Closing Date and (ii) any Straddle Period multiplied by a fraction, the numerator of which is the number of days in the Straddle Period ending immediately prior to the Closing Date and the denominator of which is the number of days in the entire Straddle Period. The Production Taxes and Non-Income Taxes (except for Property Taxes) for which Seller shall be and remain liable is the amount of such Taxes (other than the Assumed Seller Taxes) assessed with respect to the ownership or operation of the Assets for (i) any Tax period ending prior to the Closing Date and (ii) any Straddle Period, the Production Taxes or Non-Income Taxes that would be payable with respect to the ownership or operation of the Assets as of the end of the day immediately prior to the Closing Date as if such period were treated as ending as of the end of the day prior to the Closing Date. All Non-Income Taxes and Production Taxes with respect to the ownership or operation of the Assets arising on or after the Closing Date (including all Straddle Period Taxes not apportioned to Seller) shall be allocated to and borne by Buyer. The portion of Non-Income Taxes and Production Taxes to be borne by Seller and not paid by Seller on or prior to Closing shall be satisfied by a downward adjustment to the Purchase Price pursuant to Section 7.02(b)(iv). To the extent the actual amount of any such Non-Income Taxes and Production Taxes is not determinable at Closing, the most recent information available will be used to estimate the Purchase Price adjustment pursuant to Section 7.02. Upon determination of the actual amount of estimated Production Taxes and Non-Income Taxes, and once no further payments are required under Section 7.02(g), (x) Seller shall pay to Buyer any additional amount necessary to satisfy its allocated share of Production Taxes and Non-Income Taxes no later than five (5) Business Days prior to the due date for such Taxes or (y) Buyer shall increase the Credit Bid portion of the Purchase Price by any amount necessary to satisfy its allocated share of Production Taxes and Non-Income Taxes, as applicable.
Tax Allocation. 1The income, gains, losses, deductions and credits of the Partnership will be allocated for federal, state and local income tax purposes among the Partners so as to reflect as nearly as possible the allocation of such income, gains, losses, deductions and credits among the Partners for computing their Capital Accounts. Notwithstanding the preceding sentence, if the basis for federal income tax purposes of any property held by the Partnership differs from the basis of such property on the Partnership's books, any gain or loss arising from such property shall be allocated among the Partners so as to take into account the difference between the tax basis and the book basis of such property in any manner authorized by the Treasury Regulations under Section 704(c) of the Code and selected by the General Partner.
Tax Allocation. The allocation of the Purchase Price to the Purchased Assets shall be as set forth in Schedule 5.2 hereto so as to comply with Section 1060 of the Internal Revenue Code of 1986, as amended.
Tax Allocation. 6.3.1. For income tax purposes, except as otherwise provided by Laws, all items of income, gain, loss, deduction and credit of the Company for any Fiscal Year shall be allocated among the Members in the same manner that Profits and Losses (and items thereof) are allocated for that year. Any elections or decisions related to tax allocations (to the extent not otherwise provided for in this Section 6) shall be made by the Manager with the consent of all Members in any manner that reasonably reflects the purpose and intention of this Agreement, consistent with applicable Treasury Regulations.
6.3.2. In accordance with Code Section 704(c) and the Treasury Regulations promulgated under the Code, income, gain, loss and deduction with respect to any property contributed to the capital of the Company shall be allocated among the Members, solely for tax purposes, so as to take into account any variation between the adjusted basis of such property to the Company for federal income tax purposes and its fair market value upon contribution.
Tax Allocation. For purposes of this Agreement, in the case of a taxable period that begins on or before, and ends after, the Closing Date, Taxes of B▇▇▇▇▇ and SLZ shall be allocated to the portion of the period ending on the Closing Date as follows: (a) all income Taxes, sales Taxes, employment Taxes and other Taxes that are readily apportionable based on an actual or deemed closing of the books shall be allocated based on the amount that would be payable if the taxable year ended on the Closing Date, and (b) all property and other Taxes that are imposed on a periodic basis and not described in clause (a) shall be allocated based on the amount of such Tax for the entire period multiplied by a fraction, the numerator of which is the number of days in the portion of a period ending on the Closing Date and the denominator of which is the number of days in the taxable period, provided that, in the case of any Taxes determined on an arrears basis, such Taxes shall be allocated to the taxable period to which such Taxes relate.