Wayfair sparks new complexity in M&A deals


Our report highlights pressing issues


The Wayfair ruling has made M&A due diligence more critical than ever, considering the peril when a deal target has historic nexus and exposures. A buyer cannot simply register to become compliant going forward without cleaning up the past, as that may open it to liability for several past years, and also interest and penalties. Grant Thornton’s professionals help you understand all aspects of a deal to overcome challenges and get to a smooth closing.



What’s inside


The report specifies how a target’s historic noncompliance can lead to exposure for the buyer. Because sales tax represents a fiduciary relationship between the customer and the state, if it’s not collected and remitted properly, it can become a liability.


We’ll examine how to:
  • Sort through the complexities Wayfair has created for M&A due diligence
  • Identify elements to generate quality exposure calculations
  • Discover if Wayfair applies to income tax as well as sales tax
  • Be diligent if a party tries to obtain reps and warranties insurance as part of the deal

Dealmakers wrap their head around Wayfair


The Wayfair ruling created a potential bounty for states and also bountiful complexities for those conducting tax due diligence in transactions. M&A dealmakers must vigilantly sift through due diligence and excavate the past. That’s because a deal target may have historic nexus and exposures. A buyer cannot become compliant going forward without first cleaning up the past, or it may be open to liability, interest and penalties.


Wayfair is like a gold rush for states


We’ve got your back


Find out how Grant Thornton professionals can help you delve into data points like the number of transactions and whether tax has been collected. And don’t forget income tax post-Wayfair; many states are looking at it. Companies may find as well that they have to collect sales tax and also pay it on what they buy to do business.



“Although Wayfair itself makes the nexus analysis more simplistic going forward, it’s bringing all the complex stuff that’s been ignored into the deal, which makes the deal more complicated to negotiate and close.”

Rob Michaelis, Partner, Grant Thornton State and Local Tax (SALT) group and Leader, National SALT M&A team


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