Ashland worked with a prestige cosmetics company who is one of the world’s leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products. Their products are sold in over 100 countries and territories under a number of well-known brand names. They operate approximately 1,500 freestanding stores and have over 40,000 full-time employees. They manufacture their products primarily in the United States, Belgium, Switzerland, the United Kingdom, and Canada.
After several years of Ashland reaching out to this cosmetics company, their VP of Tax decided to put Ashland’s expertise to the test. They had been struggling with a Louisiana franchise tax issue for some time and had used the services of a Big Four firm to try and resolve the issues—without success. When approached by Ashland again, the VP of Tax agreed to a conference call with Kurt Van Brocklin, one of our experts, who was the former Director of Audit for the Louisiana Department of Revenue. After only two follow-up calls with Kurt, the Louisiana penalty issue was fully resolved, and the cosmetics company was very pleased. Because of this, they were able to see that Ashland had a level of talent in the state tax area that even the Big Four did not possess.
Based on their initial positive experience with Ashland, the VP of Tax agreed to a review of the company’s large states, not anticipating any significant refunds. Ashland brought a team of Single State Specialists, who were all former state auditors to their offices and reviewed the returns, workpapers, and audit schedules. At the end of day four, a meeting was held, and a Report of Findings was delivered and discussed, which included all issues identified, legal justifications and expected benefit.
They came in after the Big Four. We actually use PWC, KPMG and EY and we've also had other firms take a look at our filings. I was just surprised at the things that Ashland found.
In New York, the company had an audit underway for 2012 - 2014. Ashland’s New York single state specialist, a former NYS auditor, identified several apportionment issues that were available to be claimed. Ashland prepared the writeup, the cosmetics company presented it to the state auditor and the issues were approved. Their adjustment resulted in a tax reduction of approximately $950,000.
In Illinois, tax years 2010 - 2015 were open and Ashland’s senior team identified over $750,000 in refunds resulting from the removal of entities from the Illinois filing group. Ashland prepared the amended returns for the cosmetics company to file. This refund was approved after a small reduction due to an issue unrelated to the Ashland identified issue. Needless to say, the company was very pleased.