My company just recieved a letter asking us to do a voluntary self audit on any items shipped here out of state to see how much sales tax we owe the state for the last five years.
QUESTION:
Is this some generic letter they send to all companies or should I really go through the companies records with a fine tooth comb for the last five years? Is it a trick? Won't Redflag the company by giving them a ton of invoices needing sales tax to be paid?
Thanks in Advance.
CS
It's not clear from your post if you are referring to:L
1) items your company purchased from out-of-state sources and not re-sold to your customers, or 2) items your company sells to out-of-state customers.The first one is pretty common: you owe sales tax (also called Use Tax) on purchases when you did not pay sales tax; this is the usual case when you purchase from mail order or internet. If you haven't been filing Use Tax returns, the state is within their rights to ask you to begin doing it. And yes, it can be a big hit when you haven't been expecting it. If the city you operate in also has sales tax, you may need to file Use Tax reports with them as well.
The second one should not result in you having to collect sales tax for your own state. If you have "nexus" in another state (generally this means you have someone in the other state acting as your agent or salesperson, or you have facilities there), you do owe sales tax to that other state for sales to customers within that state.
Hi Carla,
Dept of FL? I own a sole-proprietorship in Florida and occasionally get very "official-looking" letters that turn out to be nothing more than sales tactics or worse, attempts to "scare/alarm" me into revealing critical information.
IMO, you should contact the office (get the number or address from a known source - not the letter) which presumably sent your company the letter to verify its authenticity. If it's legitimate, you can ask them your questions.
My 2¢...
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