It is not uncommon for businesses with $100M+ in spend to overpay $500K in sales & use tax annually. This hemorrhaging of cash not only hurts your bottom line but also exposes your business to needless and repetitive internal errors.
Discover how PMBA’s team of “Big 4” alumni have helped companies identify, analyze, and recover hundreds of millions in overpaid taxes
What is a Reverse Sales Tax Audit?
A reverse sales and use tax audit is the process of reviewing previous years of purchase data in an effort to find erroneous sales or use tax charges or accruals. Generally, these errors are due to a misapplication of tax laws by the seller or oversight of an exemption provided by the state.
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 You Complete a Reverse Sales Tax Audit?
A typical reverse sales and use tax audit should be completed every 2-3 years.
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