Meet Allan Lau, CPA, JD, senior tax specialist with Avalara, a cloud-based software provider of sales tax reporting and compliance to accountants and businesses. With 10+ years’ experience as a sales and use tax expert, Allan has an extensive background in state and local taxes. He worked for Deloitte Tax LLP for two years in tax consulting, where he supported clients through audits and administrative appeals, and minimized client tax liabilities. Before that, Allan was a tax policy expert with the Washington State Department of Revenue for three years, where he dealt with issues surrounding computer hardware and software, computer services, the Internet, telecommunications, manufacturing, and various tax incentives.
Allan’s career is definitely not the norm when CPAs think of the typical track. The Edge sat down with Allan to find out more about what he does day to day, what motivated him to pursue sales tax, and the outlook for this segment of the accounting profession.
Edge: What motivated you to go into this line of work?
Allan Lau: When I was nine years old, I told my parents I wanted to be a “tax expert” when I grow up. I mean, for all the professions that I could choose from—doctors, firefighters, actors, architects, graphic designers and virtually anything else—I said I would rather be a tax expert! Okay, that’s not really true, but I actually did want to be an accountant since high school. From accounting, I stumbled into tax accounting, and then into sales and use tax. I found a job in this area after college and have not looked back.
You know, there is an interesting perspective about work and pay. If everyone likes to do the work, no one gets paid for doing it. If no one likes to do the work, then whoever does the work gets paid. I know I am oversimplifying things, but I am just glad that very few people like to deal with taxes so I can get paid! Okay, to put all the lightheartedness aside, I would like to say that I am a detail-oriented person, and this line of work generally suits me as a quieter person who likes to be valued as my sales tax expertise continues to grow.
Edge: What kind of training does it take to work in a tax policy and sales tax role?
Allan Lau: It takes a combination of education and direct work experience. When I was in college, there was only one class on state and local taxes, and that class covered three different types of state and local taxes: state income/franchise taxes, sales and use taxes, and property taxes. As a result, I don’t think there really is very much you can learn about sales and use taxes in college.
Instead, most professionals learn about it through practical work experience, but also can have all sorts of different educational backgrounds. For example, when I was with the Washington State Department of Revenue, my colleagues at the time had backgrounds in legal, accounting, economics, and public administration. My current employer, Avalara, is a sales tax automation software company, and we, too, have people with diverse backgrounds who have a great deal of understanding in sales and use tax.
Edge: You’ve worked in sales tax and tax policy for the bulk of your career. What kinds of activities bring you the most enjoyment?
Allan Lau: Believe it or not, to me, tax is a very rewarding career. I am able to see my contributions in the sales and use tax area by doing the right things. This sounds like such a simple concept, but it is much deeper than it seems.
When I was a tax policy expert, I was able to help carry out state legislation that were designed for, among other things, fairer and simpler tax administrations, incentives to spur job and economic growth, clearer guidelines for all taxpayers, and better competitive balance compared to out-of-state businesses. Taxpayers are usually appreciative of the state’s effort to help taxpayers comply with state tax laws and pay their fair share of the tax.
When I was a tax consultant with Deloitte, I helped my clients take advantage of available tax exemptions and other incentives, advocated for client positions based on unique business facts and circumstances, complied with state tax laws and paid their fair share of the taxes, and minimized the clients’ tax exposures. I have worked with a number of clients who did not have any knowledge of their obligations to register and collect sales and use tax, and I would take on these opportunities to help bring them into full compliance.
Edge: How has your law degree complemented your tax knowledge? How important is it for a CPA to obtain degree in law if he or she is going to work in this area?
Allan Lau: My legal background and training allow me to understand sales and use tax from more of a legal perspective, while my accounting background enables me to understand it from an accounting perspective. It is an undeniable fact that my law degree complements my tax knowledge and I am very grateful for that. However, I must also say that my practical work experiences allow me to further expand, to a great extent, my understanding of sales and use tax.
So, is it important for a CPA to get a law degree in order to work in tax? The answer, as you may suspect by now, is yes and no. It is always great to get the additional training necessary to help further your careers, whether that training is through legal education or practical work experience. I believe there are plenty of tax positions out there where a legal background is more important, and plenty of similar positions where it’s less. Nevertheless, in general, more seasoned tax professionals have a better and broader understanding of taxes over time, from whatever backgrounds they may have, through practical work experiences.
Edge: Put yourself in the shoes of the CPA who works in a firm. What can he or she do to learn more about how to keep a business client from undergoing a sales tax audit?
Allan Lau: There is a belief that you should not try to raise “red flags” to the extent that’s possible to avoid increasing your chances of a sales and use tax audit. “Red flags” are generally something out of the ordinary that may give signals to the state that a taxpayer may be underpaying its sales and use tax. But, in reality, there is only so much a taxpayer can do to try to avoid undergoing a sales and use tax audit. As a result, if a client does not want to deal with the stress and uncertainty involved in a sales and use tax audit, the company or organization should leverage its risks by automating the sales tax reporting and compliance process or working with a third-party CPA firm that has extensive experience dealing with state auditors in case there is an audit.
Edge: If you could do anything else for a career or job, no matter the risk or reward, what would it be and why?
Allan Lau: You may not suspect this, but I have a creative side. If I can start all over again for a completely brand new career, I would want to become a musician. I think I am a decent singer, but I never learned how to play any musical instrument when I was young. If I were able to dedicate a lot of my time to learn more about music, I would have learned how to write songs so that I can have a singing career. Now I am just settling myself with singing karaoke in the bars and writing funny song parodies!
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