How a 106-Year-Old Sign Company Kept a Multi Million Dollar Acquisition on Track

YESCO makes signs. Big ones. About 70% of the casino signage on the Las Vegas Strip is theirs, including the exterior video screens on the Sphere.

The company started in 1920, when Thomas Young landed in Utah with $300 and began hand-painting signs. A century later, YESCO (Young Electric Sign Company) runs plants in Salt Lake City, Las Vegas, and Phoenix, with offices in seven states and about a thousand employees. Clark Smith, YESCO's Treasurer and Director of Finance, is the third generation of his family to work there.

We reached out to YESCO first, offering a recovery audit to see if they'd overpaid anywhere. They said yes.

A few months of digging turned up real overpayments. We filed the amended returns and got $50,000 to $100,000 back.

"That was the beginning of the relationship," Clark said. It's why, years later, when something much bigger came up, YESCO already knew who to call.

YESCO had three separate legal entities, but was reporting all their sales tax under just one registration. Sales tax is entity based, so this was a real problem. (It just hadn't caused trouble yet).

Then YESCO went to sell one of those entities. The buyer's due diligence team caught it fast: since the tax had been filed under the wrong entity, the one being sold could look like it carried full exposure across 30-plus states. The buyer held several million dollars in escrow until it was resolved.

So, we went state by state. Registered the entity being sold. Filed back returns under its correct name. Amended the old returns to remove those sales. Paid tax on the new filings, claimed refunds on the old ones, let the two sides cancel out. Over the better part of a year and a half, we dug through more than 30 states.

And it worked. 

The funds came out of escrow and the buyer moved forward with the sale. YESCO hadn't failed to collect tax, they'd just filed it under the wrong name, and it was our job to prove that state by state until the risk disappeared.

Two more projects rounded out this stretch.

Buried in old filings was a stranger problem: YESCO had pre-paid use tax on signage for a Las Vegas casino project. Then the 2008 crash hit, the project went bankrupt, and the signage never got installed. The state's first answer was that this was uncollectable bad debt. We broke the signage down to the component level and showed otherwise, the reusable parts had already been taxed elsewhere, and the custom parts had no taxable use at all since the building was never finished. The state agreed. Not bad debt. A refund, worth roughly $100,000.

Around the same time, a Texas audit YESCO tried to handle on their own had spiraled. Exposure climbed past $300,000. We took it over, worked through the state's findings line by line, and brought the final liability down to roughly $195,000.

The recovery audit was small, but it earned trust. Years later, that trust is why YESCO called us first when millions of dollars were on the line. Since then, we've recovered a "bad debt" that wasn't actually a bad debt, defended a spiraling audit, and cleaned up a Colorado backlog.

Today, YESCO doesn't think about sales tax month to month. We're filing 133 returns across 37 states for them, every month, without fail. As Clark put it: "We feel like we're taken care of."

If you're running a business that's grown (or growing), you probably have some of the same issues. It’s best to find them before a buyer or auditor does.