Federal tax gets all the attention, but state and local taxes can swing your net proceeds by 5–15 percentage points depending on geography. Plan early.
State income tax on the gain.
- No-state-income-tax states (FL, TX, TN, NV, WA, WY, SD, AK, NH on wage income): you keep more
- High-rate states (CA up to 13.3%, NY up to 10.9%, NJ, OR, MN): meaningfully reduce net proceeds
Residency planning. Some sellers establish residency in a no-tax state before closing. This is a legitimate strategy *but* requires real, sustained presence, typically 183+ days, plus other ties (driver's license, voter registration, primary home). Audit risk is real, especially in CA and NY. Talk to a CPA who's done it; do not freelance this.
Sales tax on equipment. Some states tax the sale of business equipment. The asset purchase agreement should specify who pays. Often a small line item (under 1% of price), but worth checking.
Local business tax / privilege tax. Some cities and counties have annual business license or privilege taxes. Confirm the seller's are paid current; inheriting an unpaid balance can trigger denial of your own license renewal.
Sales tax registration / nexus. If you're acquiring a route in a state where you don't currently operate, you'll need to register for whatever local taxes apply. Pool service revenue is *not* taxable in most states (it's a service), but parts and chemicals sold separately may be. Check.