Seller's perspective To avoid double tax, owners of C corporations have been known to go to great lengths to sell stock. To avoid the liability issues and inheriting the double tax problem, buyers have been known to go to great lengths to buy assets. Sellers need to know how to bridge the gap without giving up too much in the way of sales price. Sellers need to educate buyers that other issues favor a stock purchase. The equalizer in some transactions is state and local taxes.
Most states have sales and property taxes in some form.
These taxes have a large impact on the sale of assets. They usually are not applicable to stock sales. If a buyer wants the assets of a company, the purchase of those assets often causes taxes on transfer based on the value of the assets. Where the buyer is buying vehicles that are used in the business, not held for resale, there is often a sales or use tax that applies to the purchase. While the question of who will pay the tax is negotiable, the fact is someone will pay it and the transaction will be more costly.