The selection criteria for audits are most often random and can be based on a number of factors. Audits ensure businesses are correctly collecting and reporting sales tax and ensure use tax is being properly reported.
Audits generally cover a three-year period, which is the length of the City's statute of limitation; however, the statute of limitation does not apply if a business has not filed tax returns due to the City.
The auditor typically will review purchase invoices for fixed assets and a sampling of sales activity and expenses used in the operation of the business.
If a business disagrees with an audit assessment, a petition letter must be written and received by the finance director within 30 days from the date the audit assessment is mailed. The petition letter must include the basis for the appeal and the amount by which the assessment should be reduced.
After the petition letter is received, a hearing will be scheduled with the designated hearing officer.