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Georgia Fixed Asset Sales Tax Audit

Georgia Fixed Asset Sales Tax Audit

A fixed asset sales tax audit is usually a part of a larger sales tax audit. This is actually the last stop in a sense that the auditor makes when they are looking to close the audit.

Let’s start off by defining a fixed asset: Assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land, buildings, and equipment.

Now, let’s use the example of restaurant undergoing a sales and use tax audit. We already know that the auditor is looking to see that the cost of goods purchased and sold match what the restaurant is reporting for their sales. For example, if cost of goods sold was $1000.00, the auditor will apply a mark-up and then apply sales tax to the entire amount. Then, the auditor will move to consumables. Consumables are things like napkins and forks. The auditor is looking to see if the restaurant paid sales tax on the supplies that it purchased.

Finally, the auditor looks at the fixed assets. Going back to our definition, these items will be machinery, equipment, racks, and the like. At this point, you should have saved your receipts for these more expensive and larger items to prove up to the auditor that sales or use tax was paid.

Georgia Fixed Asset Sales Tax Audit

Ansari Law Firm

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