Q&A: The Challenges and Rewards of Being a SALT Expertby
There are quite a few tax professionals who niche in state and local tax (SALT) issues, but none perhaps more engaging than Rachel A. Le Mieux, CPA, CMI, a partner with Peterson Sullivan, LLP, in Seattle.
For more than 30 years, Rachel has practiced in SALT, consulting with clients on sales and use taxes, gross receipts taxes, income taxes, and other taxes. I recently sat down with Rachel to hear more about her background, the SALT niche, and her commitment to helping her clients understand their state and local tax liability while growing their companies.
Bigley: For various reasons, we hear that tax pros are hesitant to niche in SALT. What kind of personality and skills do you think a SALT niche requires?
Le Mieux: First, you must be able handle controversy on a daily basis and stand your ground when you know you’re right. You also must be willing to dive deep into the facts, any of the statutes and published rules, and guidance to support your clients’ taxable position.
You need to do whatever it takes to support your position on behalf of your clients, for example, when you’re defending your clients with departments of revenue throughout the country.
Second, you have to work internally and diplomatically within your own firm to constantly tell your partners and staff why SALT is important to the firm’s clients. This requires a stubborn and often assertive person to be in this niche! SALT consultants are very much a square peg fitting into a round hole, and because we’re primarily consulting-based, we take very detailed information and use it in ways that helps our clients understand their tax liabilities, such as tripping nexus in various states.
Third, you should have a passion for lifetime learning to keep up with constantly changing laws and rules, and the ways in which business is conducting. Depending on the source, there are between 11,000 and 50,000 taxing jurisdictions across the country.
Bigley: You serve clients in a number of industries; which one is your favorite?
Le Mieux: Manufacturing. The way my clients produce tangible or intangible products is constantly changing, and there are a lot of tax incentives throughout the United States for manufacturers. I like the industry because when I work with a manufacturer, especially in Washington state, we tour their facility to touch what it is they are doing and see it, and then go back and apply that knowledge to laws and rules that enable tax incentives, so that the client can take advantage of as many as possible. It’s also fun to tour the plants … and my clients are happiest when they can explain to you what they do and how they do it; they are very proud of what they’ve built.
Bigley: Tell me your favorite story in which you provided a solid solution to a client who had a particularly difficult problem.
Le Mieux: There was one time when my team figured out an industry was eligible for a particular tax reduction and exemption that no one else had ever thought of before. It had to do with the wine industry in Washington state, and one of the larger wineries that grew its own grapes to produce wine. I submitted a refund claim, as I felt the winery was eligible for a business and occupation (B&O) tax exemption because it processed fresh fruit.
But, the Department of Revenue (DOR) said no, citing the mention of “fresh fruit” as the reason. However, there were other elements in the same law that said in order to get an exemption for soybeans, you had to produce soybean oil.
There was no such requirement in the exemption for fresh fruit, as the law simply stated that fresh fruit had to be processed, but it did not say into what it had to be processed. So, I stood my ground and won. It took over a year for the DOR to issue a ruling, but once it did, my client had a significant advantage and got a lot of money back.
Bigley: What did this do for your business?
Le Mieux: Once the DOR made its ruling, the news went public very quickly and this enabled other wineries to apply for their refund – and wineries talk to other wineries about their successes and referred business to me.
Bigley: I understand you spent more than a decade with the Washington state DOR. What is the biggest difference between the work you did in governmental versus the private sector?
Le Mieux: I worked in the policy division, so we were always working on tax policy issues for the state, which connected to the legislative session. Now, I keep up with tax policy and am freer to get involved in more discussions than I could have when I was with the DOR.
Bigley: You were just named to the AICPA’s SALT Resource Panel. What kind of work will this involve?
Le Mieux: I’m just getting my feet wet, but one of the most recent projects was to produce information on extensions due to the flooding and hurricanes, which was all put together very quickly.
Bigley: What do you describe as your “best day?”
Le Mieux: It’s my entire day … I get up early at 4 a.m. to coach an adult rowing team, then come in the office ready to work. What makes me the happiest is when I’m able to help a client solve a problem, discover something new and work with clients who just signed on with the firm.
Bigley: If you were stranded on a dessert island with access to only one piece of technology, what would it be, and why?
Le Mieux: That’s easy – I want to get off the island! What I want is a fully charged satellite phone that already is activated with a subscription to satellite service.