Every year as the calendar flips to March, I get a little nostalgic as I remember back to 2002, and the founding of the firm.
As many of you know, it’s a big step to quit a paying job and decide to hang out a shingle in the hopes of building that better mousetrap, taking control of your own destiny, and the lofty goal of making even the whole world a better place, one client or customer served, at a time. I decided to take that leap – along with a partner in spring of 2002. And I’ve never looked back in regret at that decision. I just look back to reflect, review and take some pride in what our business has become.
This year, we celebrate our 21st birthday. We’re of legal drinking age! Bill and I spent a few days in New Orleans together with our spouses (as coincidentally an IPT sales tax conference was also held there.) And we drank a toast or two to our firm and the road we’ve traveled.
The Road
In 2002, I left Big 4 public accounting and together Bill Labhart and I founded the firm that is now Miles Consulting Group. We focused mostly on credits and incentives at that time – as we specialized in both the California Manufacturers’ Investment Tax Credit and the state’s enterprise zone programs – including EZ Hiring Credits and EZ Net Interest Deductions for Lenders. Haven’t heard of those? Well, over the years, we’ve watched those programs sunset or be eliminated at the whims of various governors and legislators! And yet, we are still standing.
We pivoted and shifted our focus and participated with clients early on as the sales taxability of electronically downloaded software has evolved, and how SaaS (Software as a Service) has become a major revenue source for our clients – and states! The ongoing efforts to apply sales tax to the digital economy is something we’ve followed from the beginning and deal with daily.
In 21 years, we’ve spent much time (almost every day, in fact) preaching about nexus – and have helped clients deal with their questions about physical presence nexus and with the “new” concept of economic nexus ushered in with the South Dakota v. Wayfair US Supreme Court case in 2018. We still help clients on a daily basis as they navigate the various nuances of “doing business” in a state and how that impacts them and the taxability of their products and related revenue streams. We also help analyze each client’s unique situation and recommend courses of action to become compliant (both retroactively using Voluntary Disclosure Agreements, or registration and back-filing) and prospectively.
Since 2002, we’ve seen the evolution of “marketplaces”, like Amazon and Etsy, and the way states have evolved along with those companies. When we started 21 years ago, the term “marketplace facilitator” wasn’t even a thing. Now we navigate that thing for our clients regularly, as more and more companies find themselves in that space. (Being a marketplace facilitator requires a company to collect and remit sales tax when they exceed certain thresholds. There are several items to consider if such reporting is required.) We’ve recently assisted several marketplace facilitator clients with audit inquiries. Our home state of California is fairly aggressive in this area, and others are close behind.
Over the years, our focus has shifted from tax credits and incentives to a much larger focus on sales tax consulting and compliance. We also do some income tax consulting – dealing again with nexus and filing requirements, as well as apportionment. And interestingly perhaps, we have clients in more foreign countries than ever before. As nexus has become easier to trip into, foreign companies now also have to navigate economic nexus and often are required to register, collect and remit sales tax on sales of their goods and services here in the US. So, we’re working with clients all across the country and across the globe!
With our home base in Silicon Valley, we’ve also had a front seat to many business combinations, mergers & acquisitions. Our clients operate mostly in the middle market space, and so they are often the targets in an acquisition. We assist with representing them in due diligence, when there’s often a much larger acquisition company bringing in their professionals to recommend an escrow amount for sales tax exposure. We’ve helped many sellers to reduce that amount and remedy the situation before, during or after the deal closes. We’re proud to have saved many companies hundreds of thousands of dollars in those negotiations.
Finally, as the economic nexus concept has swept across the states in the last 4-5 years, companies are finding that they need to register and file in many more states than they used to. As such, the need for a sales tax compliance strategy is key for companies. We now help more companies than ever in implementing such a strategy – which is usually a combination of people and software. In our 21 years, we’ve watched many software companies who specialize in sales tax compliance come and go. Meanwhile we’ve listened to what our clients have said about wanting a balance between implementing a fully automated system while also having seasoned consultants working with them in tandem to that. We’re proud to be the helping hand and sage advice to our clients as they forge the road to full compliance. It’s not as easy as plugging in a software module. As we hear every day – that human on the other end of the phone is still a welcome and necessary part of the team!
Our Team & Company
Over the years, our team make-up and even our name has changed. My original partner retired in 2014, and shortly thereafter we became Miles Consulting Group. Bill Loew joined as a partner in 2019, and we haven’t looked back. Since then, together we’ve grown the firm’s client base and have an amazing team of professionals. They have an array of experience levels in both state tax and life. Our clients appreciate our diverse workforce! We were also virtual before virtual was cool, and we offer a flexible work environment that we are incredibly proud of.
Thank You for Being Part of the Journey
Thanks for letting me wax on poetic for a bit here. But mostly thank you for being here with us. Whether you’re a vendor or client from the early years, or found this post just today while Googling “state tax consultants”, we appreciate you for being part of our growth and success. Nothing is more rewarding to us than a “thank you”, a referral or a returning client.
So, as we celebrate 21 years, and look forward to #22, we invite you to check back often to this blog, our website, our Linked In profiles, frequent updates and newsletters. We’re here to help with nexus, sales tax questions, navigating Wayfair, state tax audits, sales tax compliance – you name it. If we can help, please reach out to us at info@milesconsultinggroup.com, or at 408-266-2259.
Thank you for being a part of it. Cheers to the next 21 years!
Fondly,
Monika & Bill
