State Tax Planning for IT Services & MSPs Independent Sponsors
Independent sponsor counsel for IT services and MSPs, focused on State Tax Planning and the deal mechanics that protect sponsor economics and LP alignment.
IT Services & MSPs deals in the lower middle market run a specific playbook. State Tax Planning is where the structure either holds or starts to leak.
The typical IT services and MSPs platform sits at $8M to $100M EV with EBITDA in the $2M to $18M range. The thesis runs on MSP platform with regional or vertical-specific bolt-ons. An MSP at 70% recurring revenue trades at one multiple, at 90% trades at a different one. The mix is the deal.
How State Tax Planning actually gets structured.
Map nexus exposure in every state the target operates in, including remote workers.
Plan sales tax succession liability, particularly in California, New York, and Texas.
Address pass-through entity tax (PTET) elections where federal SALT cap matters.
Document state-by-state qualification for the new entity post-close.
In IT services and MSPs, layer in MSA assignment review with carve-outs noted as part of the State Tax Planning workstream.
Assuming state tax is a closing-mechanics issue. It is a valuation issue when the historic liability is large.
"State tax is where the seller's lawyer forgot to look. The buyer always pays for it."Jason Powell · State Tax Planning
The deal is one thing. The capital that opens up after close is another.
The capital that opens up post-close, from refinancing to growth equity to strategic exit, runs through a small set of Wall Street relationships. That network is built in.
Related deal pages.
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State Tax Planning for IT Services & MSPs, on independent sponsor terms.
Independent sponsor counsel that already speaks fluent deal-by-deal economics, structures clean LPAs, and travels with capital markets relationships for what comes after close.