- Sales tax audits can happen to any business, not just large corporations.
- Audits ensure businesses collect, report, and remit sales tax correctly.
- Common audit triggers include nexus expansion, filing inconsistencies, improper use of exemptions, customer or competitor complaints, and prior audit history.
- Nexus expansion involves business growth into new states, which may create tax obligations.
- Filing inconsistencies include irregular patterns, missing returns, and discrepancies in sales data.
- Improper use of exemptions involves missing or invalid exemption certificates.
- Customer or competitor complaints can lead to audits if tax is not charged properly.
- Businesses with prior audit history are at higher risk for future audits.
- Being organized with documentation can make audits smoother and less costly.
Source: trykintsugi.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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