State & Local Tax Planning

Texas Sales and Use Tax Audit Practice and Procedure 

The great State of Texas receives more than half of all its tax revenue and its sales and use tax, $42.9 billion, for the 2012-2013 biennium. This represents almost a quarter of the entire biennial budget. Sales and use tax is serious business for the State of Texas and it should be for taxpayers too.

Representation Throughout the Audit

Many taxpayers find out that they have been selected for audit directly from the Comptroller. Unfortunately some taxpayers find out they’ve been audited from solicitations by attorneys, accountants or other tax consultants who file Open Records requests with the Comptroller for the names of companies to be audited. However, when a company learns of a sales and use tax audit, it’s important to take it seriously.

The auditor will make contact with the taxpayer, and if the taxpayer is represented by an advisor, the auditor will begin working with the advisor. PKF Texas' State and Local Tax Advisory practice has experience representing large privately held and public companies in all facets of the sales and use tax audit process: from the initial contact with the auditor, researching and arguing taxability with auditors, preparing supporting memoranda and representing taxpayers through the audit all the way to the audit exit conference.

Appealing the Audit

If a satisfactory resolution is not obtained through the audit process, PKF Texas will represent the taxpayer at a hearing with the Comptroller’s Internal Audit Reviewer (IAR). And, if after the hearing with the IAR a taxpayer wishes to appeal the ruling, PKF Texas will represent them at the State Office of Administrative Hearings.

Sales and Use Tax Best Practices

Sales and use tax can be a complex and confusing area for many businesses. PKF Texas’ State and Local Tax Advisory practice works with many businesses to manage their sales and use tax risk profile. We assist companies to develop best practices around sales and use tax compliance and taxability.