What is a Reverse Sales Tax Audit?
A reverse sale and use tax audit is a process where we review a client’s previous years of purchase data for a given period and locate purchases for which erroneous sales tax was erroneously charged or when use tax was erroneously accrued, generally due to an exemption provided by the respective state for said purchases. Additionally, we provide guidance to the clients on how to treat purchases of the like going forward.
How Far Back Does a Reverse Sales Tax Audit Go?
The statute of limitations varies from state to state. Some states, like NY, carry a three-year look back, while others, like NJ, have a four year-year lookback period. Additionally, clients going through a sales tax audit can have an extended lookback period to offset the current audit period.
How Often Should We Complete a Reverse Sales Tax Audit?
A typical reverse sales and use tax audit should be completed every 2-3 years.
Canadian Sales Tax Recovery
Canadian Sales Tax Recovery is a 3-part service that PM Business Advisors has created. It includes Reverse Sales and Use Tax Audits, Accounts Payable Recovery Audits, and Special Canadian Sales Tax Issues. For more information on Canadian Sales Tax Recovery click here!
How PMBA Can Help
PM Business Advisors can provide you with a team of Recovery Engineers to close this gap. Recovery Engineers assist companies with locating and recovering overpayments and assist in process improvements to assure it does not happen again. Our team has over 15 years of experience and has helped companies identify and recover over $200M in sales tax.
When it comes to sales and use tax, size doesn’t matter. Our team has had success in finding $250K in overpayments for companies with as little as $25M in revenue.
|$10B Financial Services Company||$10M|
|$1B Consumer Products Company||$1.5M|
|$1B Food Products Company||$750K|
|$1B National Retailer||$675K|
|National Real Estate Owner Operator||$1M|