There are many things that small business owners in the state of California need to be aware of to run a successful business. While the main focus for most is of course to make a profit, it is important to not lose sight of peripheral matters that could arise. One of those matters is a sales and use tax audit.
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.