Over the last decade there has been an increase in the number states conducting sales and use tax audits. Many states are now contracting outside firms (CPAs, Tax Consulting firms) to conduct audits on their behalf, which has further increased the probability of a business being audited. It is estimated that over 60% of such audits result in a deficiency assessment.
Sales and use tax laws are confusing, and at times cryptic. Deficiency assessments for failing to comply with the sales and use tax rules can lead to tax assessments, interest and penalties. Corporate officers, partners and principals can even be held personally liable for the amounts due.
Under-reporting, whether intentional or by accident, almost always results in penalties and can lead to a criminal investigation. Remember, when you are under audit, the sales tax auditor is looking to issue your business the largest assessment legally sustainable.
If your sales and use tax are audited, your records from the previous from the previous three to four years will be reviewed. If you have accurate records, the process should be straightforward. ResaleTax.Com can insure that your certificates are accurate and ready to be delivered to an auditor electronically, on paper, or on CD.
Don’t risk a sales tax audit by having inadequate or improper documents. Remember, State Auditors will assume that all your transactions are taxable until you can prove otherwise.
The best sales tax audit defense is a good Sales & Use Tax Exemption Certificate Management System. Contact ResaleTax.Com today!