Areas of Practice

State Tax Consulting

We assist companies with multistate questions and state and local tax issues, including:

• Nexus studies and voluntary disclosure agreements including assistance with amnesty programs. We help clients answer the following types of questions:
  • What is Nexus?
  • Is my product or service taxable?
  • Must I start collecting and remitting sales/use tax?
  • I’ve collected tax from a given state and have not remitted it - what now?
• Sales/use tax consulting including taxability reviews and transactional support
• Income tax, franchise tax and capital tax planning including apportionment review and analysis
• Audit support

California Enterprise Zone Projects

California Enterprise Zones - General
Labhart Miles has many years of experience with the California enterprise zone program, including all of the areas detailed below: EZ Hiring Credit, EZ Sales/Use Tax Credit and EZ Net Interest Deduction for Lenders. We keep current on all issues surrounding the zones and make sure that our clients claim all the benefits to which they are entitled. We are members of the California Association of Enterprise Zones, regularly attend open forum discussions by the Department of Housing and Community Development (HCD), and track legislation affecting the EZ programs.

In the last 24 months, there has been significant activity in the California EZ area, including finalized regulations for the Hiring Credit, expiration of 23 of the 42 zones, and the new designation and re-designation of zones to fill those expirations. Note that many of the large metropolitan areas such as Los Angeles, Long Beach and San Francisco expanded their EZ geographic footprint significantly with their re-designations. Read an article on the latest 42 Enterprise Zones. Other California cities with enterprise zones include San Jose, Sacramento, Santa Ana, San Diego, Fresno, Stockton, Watsonville, and Stanislaus County, to name a few.

CA Enterprise Zone Hiring Credit
Companies with locations in California enterprise zones and program areas are permitted a credit against the income/franchise tax for hiring certain categories of qualified individuals. The credit equals 50% of qualified wages paid to such individuals for the first year of employment, 40% in the second year, 30% in the third year, 20% in the fourth year, and 10% in the fifth year. Based upon current minimum wage rates, an employer could expect to receive hiring credits of over $37,000 if a qualified, full time employee is retained for 5 years, or over $20,000 if the employee is retained just 2 years. Benefits can be found not only on a current year tax return, but can be claimed retroactively to open tax years.

Client Value: Labhart Miles helps clients identify and claim qualifying EZ credits that provide dollar for dollar tax benefits. Labhart Miles has a proven methodology to quickly and accurately identify qualifying employees, enabling our clients to maximize the amount of credit available, thereby reducing their California income/franchise tax.
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Who Qualifies?

• Companies with one or more locations in one of California’s 42 enterprise zones.
• Companies in a variety of industries including, but not limited to, manufacturing, technology, banking, utility, etc.

CA Enterprise Zone Sales/Use Tax Credit
Companies with locations in California enterprise zones and program areas are permitted a credit against the income/franchise tax for purchasing and placing into service qualified machinery in the EZ. The EZ sales/use tax credit is equal to the amount of sales tax paid on the qualified equipment, but is claimed on the income/franchise tax return. Qualified machinery includes machinery or parts used to manufacture, process, or assemble a product. The definition also includes data processing and communications equipment, including computers, copy machines, telephone systems, and faxes. Corporations may claim a credit equal to the sales or use tax paid or incurred to purchase the first $20 million of qualified machinery.

Client value: Labhart Miles has a process to quickly and accurately identify qualifying property and compile supporting documentation necessary to substantiate the credit under audit. The benefit can be in excess of 8% of the cost of the equipment.

Who Qualifies?

• Companies located in one or more of California’s 42 enterprise zones and placing into service qualifying equipment used exclusively within the zone.
• Companies in a variety of industries, including but not limited to manufacturing, software development, etc.

CA Enterprise Zone Net Interest Deduction for Lenders
Banks are permitted a deduction from California taxable income for “net interest” received from loans made to customers engaged in a trade or business located in one of California’s 42 enterprise zones. It is not necessary for the lender to be located within the boundaries of the enterprise zone to take advantage of the deduction. Net Interest Deduction benefits can be found not only on a current year tax return, but can be claimed retroactively to open tax years.

Client Value: Labhart Miles has a proven methodology to quickly and accurately identify loans qualifying for the CA EZ net interest deduction. We review loan documents to ensure audit sustainability while maximizing benefits. By providing our clients with our process, they know exactly how we arrived at the deduction—an added benefit in today’s regulatory environment.      Learn More »

Who Qualifies?

• Banks headquartered in California with most of their activities conducted within California. Banks located in or near cities with designated enterprise zones are likely to have even more benefit.
• Banks headquartered outside of California, but with several locations in the state.

Multi-State Credits and Incentives

We assist companies with the identification, quantification and substantiation of multi-state benefits available as a result of expansion, including:

• Increases in company headcount and training (ie. Hiring Credits, Training Credits, Grants and Reimbursement programs)
• Investments in property, plant and equipment (ie. investment tax credits)
• Increases in research and development activities (ie. R&D credits)
• Expansions in enterprise zones, renaissance zones, or similar targeted areas

Affiliated Services

When appropriate, Labhart Miles may refer clients to other affiliated service providers specializing in one or more of the following:

• Sales tax compliance
• Property tax consulting
• Incentive negotiations
• Certain multi-state restructuring projects
• Unclaimed property/escheat issue identification and resolution