STS Consultants’ clients can count on big tax refunds

While most people anticipate tax refunds ranging from several hundred to possibly thousands of dollars, accountant Noel Lopez forecasts that most of his clients’ checks will be in the millions.
“The biggest tax refund I have processed so far was two $14 million checks back to back,” said Lopez, who is the president and chief auditor of STS Consultants LC. “And there are billions more where that came from."
Since 1997, STS Consultants has been helping businesses, particularly in the oil and gas industry, recover refunds from overpayments made on state taxes, accounts payable duplicates and unclaimed tax exemptions. 
"Our main business for refunds is from sales taxes and severance taxes, which are taxes imposed by the state on the extraction of natural resources such as oil or gas,” Lopez said. “We also do accounts payable duplicate payments, but the sales tax by far is the majority of where our refunds come.”
According to Lopez, Texas is one of the few states in the U.S. with a multitude of tax exemptions. 
“Texas is a very rich state when it comes to oil,” Lopez said. “The state collects a lot of taxes; therefore, it has the ability to refund money, while other states, like Louisiana, have difficulty giving exemptions because of the lack of money.” 
Examples of exempt wells on which companies can claim an exemption from severance taxes include the following categories:
• oil wells drilled more than 15,000 feet below ground;
• wells that have been abandoned for 10 years but became productive again;
• wells that produce low-income or yields little or no profit.
“Unfortunately, there are still many oil companies that don’t know about this exemption and are still paying either the sales or severance tax,” Lopez said. 
On the downside, a four-year statute of limitations on severance tax refunds exists, resulting in billions of dollars than cannot be recovered once the clock runs out.
“Every 20th of the month, we lose a month, because there’s a period we cannot touch due to the four-year statute of limitations,” Lopez said. “So every 20th, all the oil and gas companies lose millions of dollars in refunds.” 
Lopez and his team work together to educate their clients and the community on how to navigate the tax laws in Texas to avoid those kinds of losses.
“We were training last week in the Dallas area on what can be taxed or not taxed,” Lopez said. “Over 160 people from the oil and gas industry came as well as people from COPAS (Council Of Petroleum Accountants Societies).”
COPAS is a nonprofit organization created to resolve issues in oil and natural gas accounting.
“Our training benefits not only the clients or industry leaders but also the state of Texas,” Lopez continued. “It enables them to the pay the correct amount of tax — not over- or under-pay.”
Another extra service that STS Consultants provides is accounts payable auditing. 
“We have a team of auditors that looks into accounts payable for the bigger companies because there’s a small percent of error where companies are paying duplicate payments to vendors,” Lopez said. “We’ve found millions of dollars on that also.”
Before he started STS Consultants, Lopez worked for the state comptroller’s office for 17 years.
“After I graduated in general business with lots of hours in accounting and math, I took the state job thinking I would stay there until I retired,” he said. ”But the opportunity came for doing refunds and I decided, ‘Hey, I think I can make it.’”
Striking out on his own, Lopez formed STS Consultants in November 1997. The first employees were a secretary and a data entry person. 
“Today, we have a team of 15 people, which includes sales and auditors,” he said. “And we have increased our variety of refunds. Our two-story building along South Padre Island Drive has room for further growth, too.”
According to Lopez, only a few tax consultants provide refund services in Texas. 
“We do Texas taxes all over the nation because some companies have oil wells in Texas but are located out of state,” Lopez said. “There are so very few Texas tax consultants, I would say you can almost count them on one hand. At the state comptroller’s office, they hired a lot of young auditors that are still learning the books, so it’s up to us older auditors to help mentor, train and get the job done.”
The staff at STS Consultants is busy year-round, not just during tax season.
“We have 300 accounts that we’re working on right now, and these refunds take a long time to get back from the state — on average one to two years — so you constantly have to be on top of the game and consistently acquiring clients,” Lopez said. “We have billions of dollars waiting to be verified by the state.”
Though Lopez could have established his services anywhere in the state, he decided to stay right at home in Corpus Christi.  
“I love Corpus Christi, and I’ll never move,” Lopez said. “It’s still like a small town, where people open the door for you and you can talk to them about anything. I love this city, and I love the people.”
As for the future, Lopez hopes he can help many more companies, particularly the larger ones, recover the refunds owed to them by the state. 
“Although oil and gas companies are our main clients, we also service other industries like construction, manufacturers, electrical manufacturers, and on a smaller scale, restaurants,” Lopez said. “Refunds are everywhere. The bigger the company, the bigger the refund.
“There could be as much as $5 billion worth of refunds out there right now,” he continued, “but surprisingly, a lot of companies don’t realize or believe they are entitled to one. Whenever those companies are ready, we’re here to help them.”
STS Consultants is located at 4220 South Padre Island Drive #B. For more information, call (800) 658-1349 or visit stsconsultant.com.