Quote:
Originally Posted by Sunspot144
(Post 994392)
Thanks for response. Any deposit into a business bank account gives auditors permission to follow up on where those deposits came from?
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Yes,I am being audited by state auditor for sales tax collection in the last 4 years.
If he is looking at your bank account (s) for the last 48 months,and spotted a large sum deposit which is not bank transfer between bank accounts,then he could conclude it is a cash sale .
With brick and mortar retail shops,a cash sale is mostly from a state resident so you should collect sales tax (unless he has a resale certificate).
He would ask for proof it is not a cash sale,so be prepared to prove it.
In my case,they are US treasury tax refund and transfer from my brokerage account to earn a little more interest income.
Here is the problem with state sales tax audit,with mail order and internet sales,most sales would be made by out of state customers,so we do not collect sales tax,venues like Ebay and Etsy may collect sales tax for out of state purchases,but we do not get to keep it,they will remit to the states each month.
Ebay and Etsy also collect customs duty for Australia for any purchase under $5xx dollars.
But the state is still going by the traditional method of auditing brick and mortar retailers !
My state rotates retailers every 4 years for sales tax audit,and asks for 4 years of sales ledger,bank statements,vendor invoices etc,which is a lot of work for a 2 % sales I made every year to state residents.
States,esp states where flooding has wrecked many homeowners,find it hard to raise property tax,so they are looking for revenue elsewhere,so keep good records,download your annual Paypal activities ,bank statements etc,you would need it someday
