The state of California takes the payment of sales tax by businesses very seriously. Accordingly, the California State Board of Equalization regularly conducts sales tax audits to make sure that businesses are paying the required amount. The failure of a business to pay what is expected could result in penalties including financial ramification. In some situations the individual responsible for the tasks associated with the corporate sales tax, such as collecting, supervising and paying it will be charges with a crime. Since these penalties can be so serious, it is important to take an audit notice seriously if your business receives it.
Working with a lawyer who handles tax audit matters is usually the best place to start. This individual can help with a variety of matters connected to an audit.
When it comes to tax matters in general, having the documentation to support the business’s sale tax records is vital. A tax lawyer can help to make sure all relevant materials, including bank statements, sale and purchase logs, business ledgers and tax returns are accounted for. Likewise a lawyer can assist with correspondence between the business and the SBE. When necessary, a lawyer can also negotiate with the agency on your behalf.
While businesses of many types could find they are facing a sales tax audit, some may be more prone to receiving a notice of sales tax audit, than others. These include:
- Businesses involving the automobile industry.
- Car washes.
- Clothing businesses.
- Landscaping.
- Restaurants.
In addition to dealing with the initial audit lawyers can also assist with appealing an audit decisions should that be necessary. For more information on the matter please see our webpage on sales tax audits.