Woman paying tax

Sales and use tax compliance is a very serious matter. Nearly 40% of our state government’s revenues are generated by sales and use tax. The Department of Revenue has recently hired over 100 additional auditors to help improve the compliance as it relates to these taxes. As a firm we have seen an uptick in the number and frequency of audits related to sales and use tax and we don’t think that will slow down any time soon.

With all of that said, the Department of Revenue has a program that allows businesses to self-report any sales or use tax liabilities. The program is designed to allow businesses that, for whatever reason, have failed to properly collect and pay their taxes, to correct the error and get whole with the Department. The following lists the benefits of self-reporting versus crossing your fingers and hoping you aren’t audited:

  • Reduced interest on liabilities
  • Waiver of any negligence penalties
  • Written agreement to restrict statute of limitations
  • Eliminate the risk of discovery under audit
  • Possible reduction in the number of periods that returns must be filed

Dealing with an audit is a very stressful situation. Programs such as this allow business owners to take back some control of their situations and provides some peace of mind that issues that may have been present in the past are now no longer open for consideration under a future audit.

MBE has a team of sales and use tax experts available to help a business through this process. If you’d like some peace of mind as it relates to these potential tax issues, don’t hesitate to reach out to us for a consultation. The best way to reach us is via email to Doug Gross at dgross@mbecpa.com.