Tennessee Sales Tax Audit Attorney
If you are currently undergoing a sales tax audit in Tennessee, you have rights to appeal your final notice of tax liability. You have the opportunity to appeal a determination within 30 days of the final notice of tax liability at an informal review hearing. Then, you get another 60 days to appeal the decision from the informal review hearing, at the State Tribunal level.
In a recent case, our client owned a small grocery store which was audited for sales tax. The main problem with this audit is books and records. Per the auditor, books and records were only supplied for one year, so the extrapolation of the numbers was of a narrow scope and may not represent the actual figures. This was agreed to by all parties.
Sales tax:
The auditor believed that the grocery items that do not require sales tax are overstated. He did not have proof either way, but the rebuttal presumption is in favor of the State. For this reason, all items claimed as food items that are exempt, were not permitted. The z-tapes did not show proof of the food items. Again, since only one year of z-tapes were provided, this was difficult to credit.
Franchise and Excise Tax:
The problem here was simply not having paid rent on the apartments. Our client had housing for his workers which required an excise tax to be paid. Our client was again charged for this type of state and local tax for unpaid taxes.
Business Tax:
Oddly enough, the auditor gave our client credit here for not having taking the credit themselves. It helps when federal tax returns are provided so that the auditor can apply tax credits if they are not easy attainable through books and records.
Tennessee audit factor of 8:
As a matter of TN audit regulation, the rents are multiplied by a factor of 8 when there is no breakout of franchise tax and excise tax. Simply, it is just the way the law is set up. Books and records of unreported rent could greatly help you here.
If your business is undergoing a Tennessee sales tax audit, contact our firm to manage or appeal your audit.
Tennessee Sales Tax Audit Attorney
