Utilization of Tax Attributes Clause Samples

The Utilization of Tax Attributes clause defines how parties may use or benefit from tax-related items such as net operating losses, tax credits, or deductions that are associated with a business or asset. In practice, this clause specifies which party is entitled to claim these tax attributes on their tax returns, and may outline procedures for allocating or transferring such benefits in the context of a transaction. Its core function is to prevent disputes by clearly allocating valuable tax benefits, ensuring both parties understand their rights and obligations regarding tax savings or liabilities.
Utilization of Tax Attributes. (a) For any Tax Return (other than a Tax Return subject to an Adjustment, which is governed by Section 4.1(c)), to the extent a Tax Attribute of a Party determined on a “with and without basis” or otherwise designated by the Parties (the “First Party’s Tax Attribute”) is either (1) utilized to offset Taxes due and payable by the second Party, or (2) refunded to the second Party, the second Party shall pay to the first Party an amount equal to (1) the amount by which the second Party’s Taxes were reduced through utilization of the First Party’s Tax Attribute, or (2) the amount of any refund received by the second Party that is attributable to the First Party’s Tax Attribute, respectively. All payments pursuant to this Section 3.5 shall be calculated on an item-by-item basis, such that both Parties may owe payments to the other Party with respect to different items arising in the same year. For the avoidance of doubt, the Parties agree that this Section 3.5 shall be interpreted such that neither Party should benefit to the detriment of the other. Whether a Tax Attribute is a First Party’s Tax Attribute for purposes of this Section 3.5(a) shall be determined without regard to the allocation of such Tax Attribute (if any) under Section 4.4(a). (b) To the extent that (1) a Party applies or causes to be applied any otherwise refundable amount as a credit toward or a reduction in Taxes otherwise payable (e.g., through an offset to estimated payments, extension payments, or payments made with the filing of the return), or a Taxing Authority requires such application in lieu of a Refund, and (2) such otherwise refundable amount, if received as a Refund, would have been payable by such Party to the other Party pursuant to this Section 3.5, then such Party shall pay such amount to the other Party no later than ten (10) days after such otherwise refundable amount is applied to reduce Taxes otherwise payable.
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Utilization of Tax Attributes. (a) Amended Returns. Any amended Tax Return or claim for a refund with respect to any member of the SpinCo Group or any Direct Sale Transferred Subsidiary may be made only by the party responsible for preparing the original Tax Return with respect to such member of the SpinCo Group or Direct Sale Transferred Subsidiary pursuant to Section 5. Except as required by Applicable Law, such party shall not file or cause to be filed any such amended Tax Return or claim for a refund without the prior written consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed, if such filing, assuming it is accepted, could reasonably be expected to change the Tax liability of such other party (or any Affiliate of such other party) for any Taxable period. (b) Carryback of Tax Attributes. (i) To the extent permitted by Applicable Tax Law, Parent shall cause the SpinCo Group and each Direct Sale Transferred Subsidiary to elect to forego carrybacks of any Tax Attributes of the SpinCo Group or such Direct Sale Transferred Subsidiary to a Pre-Distribution Period. (ii) If Parent is unable to forego carrybacks of any Tax Attributes of the SpinCo Group or a Direct Sale Transferred Subsidiary to a Pre-Distribution Period, the Company Group shall, at the request of Parent and at Parent’s sole expense, file any amended Tax Returns reflecting such carryback (unless such filing, assuming it is accepted, could reasonably be expected to increase the Tax liability of the Company or any of its Affiliates for any Taxable period). If the Company Group (or any member thereof) receives a Tax Refund as a result of such a carryback (or otherwise realizes a reduction in cash Taxes actually payable, determined on a “with and without” basis), the Company shall remit the amount of such Tax Refund (or an amount equal to any such other reduction in cash Taxes) to Parent in accordance with Section 9(b).
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Utilization of Tax Attributes 
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Related to Utilization of Tax Attributes

  • Allocation of Taxes For purposes of determining the amount of Taxes that relate to Pre-Closing Tax Periods and Straddle Periods for purposes of any obligation to indemnify for Taxes under Section 4.2(b) the parties agree to use the following conventions: (1) Taxes in the form of interest, penalties, additions to tax or other additional amounts that are actually incurred, accrued, assessed or similarly charged on or after the Closing Date but that relate to Taxes that accrued on or before the Closing Date shall be treated as occurring prior to the Closing Date; (2) Except for Taxes for which the Operating Partnership is responsible hereunder and for real estate taxes (apportioned pursuant to Section 1.5), for all Taxes that are payable with respect to any Straddle Period, the portion of such Tax that is attributable to the portion of the Straddle Period ending on the Closing Date shall be allocated between the portion of the period ending on the Closing Date and the portion of the period beginning after the Closing Date using the following conventions: (i) in the case of such Taxes resulting from, or imposed on, net or gross income, Taxes resulting from, or imposed on, any sale, receipt, use, transfer or assignments of property or other asset, or Taxes resulting from, or imposed on, any payment or accrual of any amounts (including, without limitation, dividends, interest, or wages), the amount allocated to the portion of the period ending on the Closing Date shall be the amount of Tax that would be payable for such portion of the Straddle Period if such Person filed a separate Tax Return with respect to such Taxes or Taxes solely for the portion of the Straddle Period ending on the Closing Date using a “closing of the books” methodology for allocating items of such Tax Return; and (ii) in the case of all other such Taxes, the amount allocated to the portion of the period ending on the Closing Date shall equal to the amount of Taxes for the entire Straddle Period multiplied by a fraction the numerator of which is the number of calendar days in the portion of the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire Straddle Period. For purposes of clause (1), any item determined on an annual or periodic basis (including amortization and depreciation deductions and the effects of graduated rates) shall be allocated to the portion of the Straddle Period ending on the Closing Date based on the relative number of days in such portion of the Straddle Period as compared to the number of days in the entire Straddle Period.