What is state and local tax (SALT) and why does it matter for my business?

State and local tax refers to the full range of taxes imposed by state and local governments, including state income and franchise taxes, sales and use taxes, payroll taxes, property taxes, and various other levies that vary significantly by jurisdiction. SALT matters for your business because these obligations are not always obvious — nexus rules, economic thresholds, and apportionment requirements create tax obligations in states where you may not even realize you are doing business. The consequences of unaddressed SALT exposure include back taxes, penalties, and interest that can accumulate over multiple years before they are discovered — making proactive SALT analysis one of the most valuable investments a business can make.