The rising industry of e-commerce and internet suppliers is a target for Sales Tax Audits. Traditionally, sales taxes aren’t collecting in this industry. As a result, the continuing state wants to ensure that they are being paid. As a high-rated accountant in Chicago, we are being known into an Ecommerce Internet Sales Tax Audit constantly.
The last quantities that I read showed that the State of Illinois was operating at a 39.6% fiscal deficit. Naturally, with this sort of shortfall, the continuing state is going to increase their auditing activities. Generally speaking, audits are an extremely profitable endeavor for most governmental agencies. Since Sales taxes primarily go, to Springfield directly, they are going to come after Sales Tax collecting businesses like yours. Given the condition of our overall economy, no rational plan on the books to remove this deficit, we expect to visit a continuation in this auditing activity. Sales taxes audits are extremely intimidating situations in e-commerce retailing.
You have to be able to confirm in some recoverable format that the total amount reported on your sales taxation statements was the quantity of revenues received by your business over the time in question. Not the sales taxable part just, but the total taxable and non-taxable sales of the business. You have to prove it.
- Centralized and consolidated billing
- Are financial statements prepared
- An exceptionally high growth rate in sales will typically
- Strives to make the significant interesting and relevant
- Differentiate between dependability and validity
Once again, it’s your task to demonstrate that your sales tax returns are correct. If you fail to prove this, the state will generally assume that you are not reporting all your income. Many customers and business owners over the years have said something like, “But I’m a cash business.
How can they verify that I stole. Nothing could be further from the reality. What the continuing state will do is called a cost of goods sold audit. It is very possible for an auditor to find the true names of your suppliers. They’ll then demand lots from your suppliers on the money you have paid them for resale-able goods, per year, over the main one to six years that are being audited.
The state will then establish a markup for those goods, usually high, and reconstruct your sales for the period. The assumption that the condition makes is that everything purchased was resold at the precise generally, established tag up. They don’t and cannot generallymake a deduction for sales special discounts, clearance items, lifeless inventory, damaged inventory, or robbery. Once a sales shape has been reconstructed, it is set alongside the sales taxation statements that were submitted simply.