Gerald Barbo is involved primarily in consulting with companies on issues related to Multi-state Income and Franchise Taxes with emphasis on the California Revenue and Taxation Code. These activities include multistate compliance studies, transaction planning and reviews, income / franchise tax audit reviews, and representation during the audit appeals process. Prior to joining PriceWaterhouseCooper Gerald Barbo’s professional experience and business history includes working for Del Monte Corporation, San Francisco, CA from 1976-1986. During this period Mr. Barbo held various state and federal tax management positions of increasing responsibility. He has over twenty-nine years of blended corporate compliance & planning and public accounting consulting experience in dealing with Multi-state Income / Franchise Tax issues in a public accounting and corporate environment.
Throughout Gerald Barbo’s State and Local Tax Career he as been affiliated with the following groups: Board of Directors of California Taxpayers’ Association; California Association of Equipment Lessors; Board of Directors of the Alameda County Taxpayers Association; California Society of CPAs and the California Society of CPAs Annual California Tax Conference.
Gerald Barbo is the co author, Journal of California Taxation articles including Application of California Net Operating Loss Carryforward Provisions to Members of a Unitary Group and California Combined Reporting Is it Time to Rethink the "Unitary But Separate" Concept? Also another article that was published include: Better Business: Enterprise Zone Creates Opportunity May, 1992 San Francisco Business Magazine, The Added Cost of Producing Newspapers: Newspaper Publishers Face the Latest Sales and Use Taxes, October 1992 Newspaper Financial Executive Journal.

(KJ) What is the state of State and Local Tax Consulting today? What changes have you experienced in your career?

(GB) Changes? Where to start? Today, state tax planning is an essential “front burner” component of corporate tax strategy. But it has not always been that way. When I first got into this business in 1976, state tax consulting was, for all practical purposes, non-existent. All the attention was on international and federal tax planning. State tax was essentially a compliance activity, largely driven by bricks and mortar nexus. Multistate tax planning was generally limited to only the very largest and most profitable companies. Over time, as federal tax rates declined and states began more aggressive enforcement of long-standing and largely ignored nexus standards, state taxes started to take on increasing importance and state tax consulting began to get some traction. By the early 1990’s businesses began to look for ways to legally reduce their growing state tax expense and state tax consulting had come of age. At the same time, substantial new industries began to emerge, centered around software and other intellectual property and none of these new industries fit comfortably into the existing state taxing structure, which was largely designed to tax widget manufacturers. The 1990’s were tumultuous times in state tax consulting. There were more questions than answers to key issues and everyone was looking for the next New Thing in state tax minimization. The accounting scandals that led to Sarbanes-Oxley had a chilling effect on tax planning in general and we have only recently begun to see companies look favorably on state tax planning activities.

(KJ) What has been the effect of SOX Compliance and how has it impacted consulting?

(GB) In my view, SOX compliance had a dramatic impact on tax consulting, largely due to the fact that corporate tax departments suddenly and unexpectedly found themselves consumed by the process of documenting appropriate controls over the tax function. This new function was additive to their on-going tax compliance and audit functions, and head count increases were not common in most tax departments. Virtually overnight, a demand was created for Section 404 compliance assistance to the detriment of routine tax planning. Corporate tax departments were simply too busy with Section 404 compliance to devote time to much of anything else. Now that companies are getting a handle on Section 404 compliance, their appetite for tax planning is returning.


(KJ) Do you anticipate any material changes on the horizon?

(GB) Absolutely! As I mentioned earlier, our existing state tax structure is designed largely to tax “bricks and mortar” widget makers, and is based on a manufacturing economy that has substantially and fundamentally changed over the last 40 years. Services, intellectual property and cross border internet-based transactions account for an increasingly significant part of our national and international business activity. But our state & local taxing structure is not nearly as nimble and still struggling to keep up. The fundamental physical nexus aspects of the Commerce and Due Process clauses of our Constitution frankly don’t mesh well with the business realities of the 21st century. Why should they? How could the founding fathers have anticipated such profound changes when they drafted these wise Clauses? They couldn’t and didn’t. Much wiser men and women than me will spend the next decade or two reconciling our tax laws with 21st century businesses. As dynamic as the last 30 years have been, we haven’t seen anything yet!

(KJ) What advice would you give anyone entering the public accounting profession today?

(GB) Never stop broadening your skill set. Get as much education as you and/or your employer can afford. Be up for any challenge. Be comfortable admitting: “I don’t know”, followed by: “but I will find out”. Work hard to train your staff – it makes it easier for you to get promoted when there’s someone to step into your job. Don’t jump jobs solely for the money, and if you work for a big firm, transfer at least once (if not twice) to a major metropolitan office; you’ll be surprised what a broadening experience it will be. But most of all make time to be with the people you love. They’ll grow up or be gone before you know it. Work will always be there. Always.


(KJ) What type of model do you use in developing teams for your firm?

(GB) In a firm as large and as a diverse as PwC, no one size fits all. We give each office and each service line a fair amount of amount of autonomy in deciding how best to serve their respective client bases. We’ve tried a number of broad models and I doubt we will ever stop tweaking the process. Currently most of our tax teams are built around industry groups, where dedicated teams of staff, managers and partners work together to serve clients in the same or similar industries. Specialty practices such as SALT are grouped in support teams, although some offices have incorporated the specialty practices into their client service teams. This is especially true in offices that serve clients clustered in a single industry, such as energy, financial services or technology.



(KJ) What strategies are effective in the retention of the talent your firm develops?(GB) Much has been written about the so-called Gen-Xers, Millenniums and succeeding generations. We’ve come to appreciate that they have different values and outlooks than Baby Boomers. Like most Boomers, I was brought up to do what I was told, work hard, call everyone “sir” or “ma’am” and good things would come to me – in 15-20 years or so. Our young talent does not see it that way. To them, the journey is as important as the destination; maybe more so. They seek constant stimulation and their respect must be earned. They are not afraid to say: “I think I’ve learned enough about [insert topic of choice]; can I do something more challenging?” They are frankly better at thinking outside the box and not afraid to color outside the lines. To keep these people we need to give them challenging assignments and the tools to help them get the job done. We try to give them clear career paths and let them know, as succinctly as possible, what it will take for them to advance. We do our best to timely recognize and reward superior performance. In order to bridge the perceived partner/staff gulf, every single employee is assigned a Connectivity Partner; someone they can go to for guidance on any issue at any time. We are more inclined to let staff transfer from group to group and city to city, if that’s what they want to do. And - God Forbid - we ASK them for their opinions about working conditions, compensation, career tracks, you name it, and – even more revolutionary – we listen to what they have to say and implement a great deal of their ideas. In short, we are giving our top talent a greater say in how we conduct our business and where they fit into it. After all, in a few short years, it will be their business.

Kathleen Jennings (KJ)
Editor, The Tax Intelligence Report
Kathleen@etsearch.com

Gerry Barbo (GB)
Tax Principal, PricewaterhouseCoopers, San Francisco, CA.
Gerald.Barbo@us.pwc.com