Sales & Use Tax Guidance

Use tax is basically a self-assessed sales tax. The state tax rate is generally the same as sales tax and the same exemptions generally apply. The tax applies when you buy or lease taxable items or services for your business but the seller failed to collect sales taxes.

If you are asking the question, the answer is probably “yes.” Some research is in order. We have the resources to answer your question as well as help you with any registration process.

In many cases, the sales and use tax audit is a repeat of the audit done 3 to 4 years ago as the states cycle through these audits. If it is your first one, the auditor has provided you with a “Request for Information.” Most likely, the auditor will review transaction to determine if sales tax was properly collected. For the Use tax portion, the auditor is looking for receipts for various categories of expense or fixed assets to determine if sales tax was paid. The record gathering aspect of the audit can be time consuming so you should keep detailed and organized records to limit the data gathering timeline.