Last week I received an audit notice from my state (Washington State) informing me that they had selected my business for a ‘limited scope audit’. The purpose of the audit is to determine whether or not my business paid sales tax on certain asset items. I quickly turned the whole matter over to my CPA. Paying sales tax depends a lot on whether you buy something locally or over the internet from a seller based in another state. Everyone knows this, including the state audit group.
I wonder what they’re up to? Could it be related to Internet Sales Tax? Internet Sales Tax is a hot topic nowadays and I see it popping up in the news a lot lately. Could the state be gathering data on how much revenue they’re losing without an Internet Sales Tax?
Speculation aside, we can all assume that the state governments are working feverishly to come up with a solution to the Internet Sales Tax problem. For states that depend on sales tax for revenue, not having an Internet Sales Tax solution in place represents lost revenue. Problems that represent lost revenue somehow have a way of finding solutions.
At any rate, I’ll leave it to my CPA to sort through my records or tell me what records to come up with and keep watching the Internet Sales Tax news alerts.