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Out of State Sales tax & FL Dept of Rev

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?

Reply to
carla spears
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Its probably not a trick and will likely cause a state-sponsored audit of your files if you don't volunteer the information. I'm guessing you are really referring to Use Tax since your state can't charge you sales tax on a sale completed outside the state. I've heard of alot of states trying to crack down and collect on Use Tax because very few people ever report it.

You may find it easier to pull a vendor contact report that shows vendor addresses. You can then run down it with a highlighter and mark those who are out of state. Using that list and a Vendor Transaction Detail Report, using the 5 year period specified, double-click your invoices to make sure the amount you paid doesn't have shipping/freight/handling included as those aren't generally subject to use tax. Fun, fun.

Reply to
Tee

This is a tax-related question instead of a QB-related question. I suggest you repost this at misc.taxes.moderated since you will get multiple answers from tax professionals. Misc.taxes.moderated is (obviously) a moderated forum so there will be a delay of a day or so before your question is posted and another day or so before the replies are posted.

-- Vic Roberts Replace xxx with vdr in e-mail address.

Reply to
Victor Roberts

While not exactly on-point, be aware that tax auditors have a back-channel communication method that's quite robust.

Here's the way it works:

  1. You are subjected to a field audit by your state, say Florida, comptroller's office.
  2. If you give them complete access to your customer lists, files, etc., they will take note of your customer's in, say, California.
  3. Your auditor will hand over* your list of California customers to their collegue in that state and your California customers will get audited to determine whether they paid the California use tax on stuff they bought from you.
  4. You will get blamed by your California customers for snitching them out.

The fix is to give the auditor only what he specifically asks for. Do not agree to fishing expeditions.

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*A state comptroller often maintains representatives all over the country. I've been "asked" to cooperate with field auditors from two different states who live in my town. I also believe that the best looking female auditors are the greatest receipients of these intelligence gems.
Reply to
HeyBub

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