{"id":695,"date":"2023-10-27T14:27:03","date_gmt":"2023-10-27T14:27:03","guid":{"rendered":"https:\/\/leyton.majjane.agency\/us\/article\/sales-and-use-tax-audits\/"},"modified":"2026-07-26T16:24:59","modified_gmt":"2026-07-26T14:24:59","slug":"sales-and-use-tax-audits","status":"publish","type":"article","link":"https:\/\/leyton.com\/us\/insights\/articles\/sales-and-use-tax-audits\/","title":{"rendered":"Sales and Use Tax Audits"},"content":{"rendered":"<p>A 2022 survey of business that had been <strong>audited <\/strong>in the last 18 months revealed just how much businesses stand to lose on <strong>sales tax audits<\/strong>, why they are audited, and the most likely state to get an audit notice from.<\/p>\n<h2 class=\"wp-block-heading\"><mark class=\"has-inline-color has-yellow-color\">Why?<\/mark><\/h2>\n<h2 class=\"wp-block-heading\"><mark class=\"has-inline-color has-yellow-color\">Where?<\/mark><\/h2>\n<p>Prior to the <em>Wayfair <\/em>case in 2018, the chance of receiving an <strong>out-of-state audit<\/strong> notice were quite rare.&nbsp; Now, this script has been flipped.&nbsp; 41% of businesses surveyed were audited by their home state, while 45% of businesses had an audit from out-of-state.&nbsp;<\/p>\n<h2 class=\"wp-block-heading\"><mark class=\"has-inline-color has-yellow-color\">How Much?<\/mark><\/h2>\n<p>Unfortunately, many business owners tend to bury their head in the sand until it is too late.&nbsp; Many don\u2019t realize just how expensive an <strong>audit <\/strong>can be until their in the midst of one, with the average sales tax audit costing a business $114,147!&nbsp; This is from having to pay the <strong>original sales tax out-of-pocket<\/strong>, paying a <strong>failure to file fee<\/strong>, paying a <strong>failure to pay fee<\/strong> (yes, this is addition to the failure to file fee \u2013 crazy, right?), and <strong>interest on the amount due<\/strong> \u2013 not to mention the time and money spent on having to redirect efforts of business owners and employees focusing on addressing the audit.<\/p>\n<p>A quick example: Let\u2019s say you have sales tax <strong>nexus <\/strong>in California and made $100,000 in taxable sales on which you failed to <strong>collect<\/strong>, <strong>file<\/strong>, and <strong>remit<\/strong>.&nbsp; On average, if the tax rate due is 9%, you\u2019d owe $9,000 in back tax, plus $900 for both the failure to file and pay fees (10% each), plus interest (10%) which can <strong>compound <\/strong>and <strong>accumulate <\/strong>quickly, bringing the total to $11,700.&nbsp;<\/p>\n<p>But for many businesses, the amount can be much worse.&nbsp; Why?&nbsp; Because many businesses have <strong>sales tax nexus in multiple states<\/strong>, going back several years, resulting in more tax, more fees, and more interest.<\/p>\n<h2 class=\"wp-block-heading\"><mark class=\"has-inline-color has-yellow-color\">Solution?<\/mark><\/h2>\n<p>By doing <strong>preemptive <\/strong>work, you can avoid all of this headache, out-of-pocket money, and time.&nbsp; You should always register for <a href=\"https:\/\/leyton.com\/us\/state-and-local-tax-s-a-l-t\/sales-use-tax-refund-reviews\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>sales tax<\/strong><\/a> where you have nexus. Leyton can assess your business\u2019s nexus footprint and risks, and come up with action plan to suit your current situation.<\/p>\n<div class=\"calendly-inline-widget\" data-url=\"https:\/\/calendly.com\/us-salt-team\/us-state-local-tax?text_color=012d48&amp;primary_color=ec6839\" style=\"min-width:320px;height:700px\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>A 2022 survey of business that had been audited in the last 18 months revealed just how much businesses stand to lose on sales tax audits, why they are audited, and the most likely state to get an audit notice from. Why? Where? Prior to the Wayfair case in 2018, the chance of receiving an [&hellip;]<\/p>\n","protected":false},"author":89,"featured_media":696,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[429],"tags":[470,455],"expertise":[],"class_list":["post-695","article","type-article","status-publish","format-standard","has-post-thumbnail","hentry","category-state-local-tax-salt-en","tag-nexus-en","tag-salt-en"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.1 (Yoast SEO v28.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Sales and Use Tax Audits | Leyton<\/title>\n<meta name=\"description\" content=\"Find where sales and use tax audits happen, why they happen, how much they could be and the solution to avoiding them.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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