An earnout provision makes the purchase price (typically, some part of it) payable in the future dependent on the buyer's financial performance. Earnout arrangements have important tax implications for both the buyer and seller.This article focuses on the buyer side of the equation. An earnout is a useful means of bridging a valuation gap and getting a deal done. This chart summarizes earn-out issues in private acquisition agreements. We represent 351 cities and towns and the municipal officials who run them. An official website of the Commonwealth of Massachusetts. Here's how you know Official websites use .mass.gov.