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. Buyer shall prepare an allocation of the Upfront Payment, the Contingent Payment, and any amount that would be treated as consideration for U.S. federal income tax purposes among the Acquired Assets and the restrictions set forth in Section 9.9 in accordance with Section 1060 of the Code and the U.S. Treasury regulations thereunder (and any similar provision of state, local or foreign Law, as appropriate) (the “Draft Allocation”). Buyer shall deliver the Draft Allocation to Seller within ninety (90) days after the Closing Date. Seller shall review the Draft Allocation and provide any objections to Buyer within fifteen (15) days after the receipt thereof. In the event Seller does not object to Buyer’s Draft Allocation, such Draft Allocation shall be final (the “Final Allocation”). If Seller raises objections to the Draft Allocation or any subsequent adjustments, the Parties will negotiate in good faith to resolve such objection(s). Any subsequent adjustments to the consideration for the Acquired Assets shall be reflected in the Final Allocation as revised by Buyer and subject to Seller’s reasonable comments in a manner consistent with this Section 8.5, the imputed interest provisions of the Code, Section 1060 of the Code, and the U.S. Treasury regulations thereunder (and any similar provisions of state, local or foreign Law, as appropriate). Seller, Buyer and their respective consolidated Affiliates shall report and file Tax Returns (including IRS Form 8594) in accordance with the Final Allocation. Neither Buyer nor Seller shall take any position (whether in audits, Tax Returns, or otherwise) that is inconsistent with such Final Allocation unless required to do so by applicable Law.
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 1.4. 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. 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. 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. (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. 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.
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. 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. The portion of any Tax related to a Straddle Period that is allocable to the portion of a Straddle Period ending on and including the Closing Date shall be (i) in the case of property and similar ad valorem Taxes and any other Taxes not described in clause (ii) below, equal to the amount of such Taxes for the entire Straddle Period multiplied by a fraction, the numerator of which is the number of days during the Straddle Period that fall prior to the day after the Closing Date and the denominator of which is the number of days in the entire Straddle Period and (ii) in the case of Taxes based on income, receipts, remuneration, sales, proceeds, profits or similar items and other Taxes that are readily apportionable based on an actual or deemed closing of the books, computed as if such taxable period ended as of the close of business on the Closing Date. The portion of any Tax related to a Straddle Period that is allocable to the portion of the Straddle Period beginning the day after the Closing Date is the portion of such Tax not allocable to the portion of the Straddle Period ending on and including the Closing Date under this Section 5.7(c). Notwithstanding anything to the contrary in this Agreement, any transaction that occurs on the Closing Date but prior to the actual time of the Closing and that is not in the ordinary course of business shall be deemed to occur in a Pre-Closing Tax Period or the portion of a Straddle Period ending on and including the Closing Date.