Georgia Sales Tax Audits Defense Lawyers
If you are undergoing a Georgia sales tax audit, you might be wondering what your options are if you do not have all of your books and records ready for the audit.
Many of our retail store owners complain of being overburdened by not having all of their books and records for goods purchased from other retailers.
For example, a convenience store owner might find cheaper products from Amazon, Wal-Mart, or another retailer. When they are being audited for sales tax, they will have to produce these receipts to prove that sales tax was paid on these items.
The logical reason for not keeping receipts from items purchased from these retailers is that they always charge sales tax. When have you ever been to Wal-Mart and not paid sales tax? The only time somebody is exempt from paying sales tax is if they are using an EBT card provided by the USDA in lieu of traditional food stamps.
Receipts and Audit Expectations
Keeping this in mind, the auditor will always ask for receipts.
Now, assume you are on the second stage of the sales tax audit. This means that they are now looking at consumables.
What Are Consumables?
Consumables are those supplies that you use in your own place of business. Again, the Wal-Mart purchased products that are always taxed need to be proven in the sales tax audit. At the very least you need to have paid a use tax.
Use Tax Considerations
Now, let’s complicate this scenario another step.
- Assume that you had originally purchased an item from any wholesaler with your sales-tax exemption license.
- Instead of reselling the item, you ended up using it in your own business.
- That calls for use tax to be paid on the item.
Complications in Record-Keeping
The complications of books and records are tremendous. However, even if you have all of your books and records, the auditor will only sample 6 out of the 36 months that you provide them.
How We Can Help
Call our office to discuss your audit and how we can help bridge the gap.
Frequently Asked Questions
What should I do if I don’t have all my receipts for a Georgia sales tax audit?
If you’re missing receipts, especially for purchases from retailers like Wal-Mart or Amazon, you may still face scrutiny during a sales tax audit. Although these retailers typically charge sales tax, auditors often require proof in the form of receipts. You may need to explain the context and provide alternative documentation or pay use tax where necessary.
What are “consumables” in a sales tax audit?
Consumables refer to products used in the operation of your business rather than sold to customers. Even if bought from retailers that charge sales tax, auditors will still require proof of tax paid or expect you to have remitted use tax on these items.
What is the difference between sales tax and use tax?
Sales tax is paid at the time of purchase, typically to a retailer. Use tax, however, is owed when taxable items are purchased without paying sales tax, such as from a wholesaler using an exemption license, and then used rather than resold.
How far back can a Georgia sales tax audit look into my records?
Auditors typically request documentation for a 36-month period but often only sample six months within that timeframe to assess compliance. Those sampled months carry significant weight in the audit’s findings.
How can a sales tax attorney help during an audit?
A sales tax attorney can help you understand what documentation is critical, communicate with auditors on your behalf, reduce penalties, and ensure compliance with Georgia tax law, especially in complex situations involving missing records or use tax obligations.