Sales And Use Tax Audit Manual - Revenue.pa.gov
Pa. Department of Revenue – Bureau of AuditsSales and Use Tax Audit ManualSALES AND USE TAX AUDIT MANUALMajor HeadingsTable of ContentsIntroductionChapter 1 – Tax OverviewChapter 2 – Audit FunctionChapter 3 – Procedures (Tax Type)Chapter 4 – Procedures (Exam Type)Chapter 5 – Audit PolicyChapter 6 – Audit ReportChapter 7 – Appeal ProcessLast Updated: 6/12/2012Chapter 8 – Delinquent Tax AssignmentsChapter 9 - Criminal Tax ProgramChapter 10 – Computer Assisted AuditsAppendix 1 – Tax ReturnsAppendix 2 – Audit DocumentsAppendix 3 – Computer FilesAppendix 4 - Codes and Information ListsAppendix 5 – SIC/NAICS Codes1
Pa. Department of Revenue – Bureau of AuditsSales and Use Tax Audit ManualTABLE OF CONTENTSSALES AND USE TAX AUDIT MANUAL . 1INTRODUCTION . 13A. AUDIT GUIDE . 13B. QUALITY CONTROL. 13CHAPTER 1 - TAX OVERVIEW . 14A. NEXUS . 14B. TAX TYPES . 151. Sales, Use, and Hotel Occupancy Tax . 15a. State Sales, Use, and Hotel Occupancy Tax . 15i. Imposition . 15(1) Bracket Schedule16ii. Basic Rules . 16(1) Situs16(2) Purchase Price16(3) Tangible Personal Property16(4) Services17(5) Statutory Exclusions17(6) Exemptions17iii. Exemptions . 17(1) Business Exemptions17(2) Government Exemptions17(3) Resale Exemption17(4) Special Exemptions18(5) Wrapping Supplies18(6) Isolated Sale18(7) Out-of-state Sales18(8) Keystone Opportunity Zone (KOZ) and Keystone Opportunity Expansion Zone (KOEZ)18(9) Direct Pay Permits19iv. Pennsylvania Exemption Certificate (REV 1220) . 19(1) Completion of Form19(2) Exempt Organization Declaration of Sales Tax Exemption Form (REV 1715)20vi. Uniform Sales & Use Tax Certificate – Multijurisdiction. 20b. Local Sales, Use and Hotel Occupancy Tax . 20Purchase Price . 21c. Related Taxes . 21i. Public Transportation Assistance (PTA) Taxes/Fees . 21ii. Vehicle Rental Tax . 22d. Tax Collection . 22e. Interest and Penalty . 22i. Interest . 22ii. Penalties. 23(1) Understatement Penalty23Last Updated: 6/12/20122
Pa. Department of Revenue – Bureau of AuditsSales and Use Tax Audit Manual(2) Failure to File/Major Understatement23(3) Tax Evasion (Major Penalty)23iii. Multiple Additions/Penalties . 23f. Administration and Enforcement of Tax Laws. 24g. Information Resources . 242. Employer Withholding of Pennsylvania Personal Income Tax . 24a. Pennsylvania Personal Income Tax . 24i. Individuals . 24ii. Partnerships . 25(1) PA-20S/PA-65 – Commonwealth of Pennsylvania Pa S Corporation/PartnershipInformation Return25(2) PA-40NRC – Nonresident Consolidated Income Tax Return25iii. Personal Income Tax Rates . 26b. Employer Withholding Requirements . 26CHAPTER 2 - THE AUDIT FUNCTION . 27A. RECORD KEEPING REQUIREMENTS. 27B. EXAMINATION OF RECORDS . 27C. CONFIDENTIALITY . 27D. MEASURING COMPLIANCE . 28E. TAXPAYER’S RIGHTS AND RESPONSIBILITIES . 29CHAPTER 3 - PROCEDURES (TAX TYPE) . 30A. OVERVIEW . 30B. PRE AUDIT PLANNING . 301. Taxpayer Research . 30a. Audit Request . 30b. Schedule 1 – Returns as Filed . 31c. Taxpayer Summary Information (TSI) . 31i. Section 1 – Registration Information. 31ii. Section 2 – Previous Audit Information . 31iii. Section 3 - Appeal/ Refund Petition . 32iv. Section 4- Letter Rulings . 32v. Section 5- Possible Affiliated Account Numbers . 32vi. Section 6 – Tax Return Analysis . 32vii. Additional Detail Report. 32viii. Bankruptcy Info. 32d. Department Mainframe Computer Files . 33i. Annual System . 33ii. KITS (Keystone Integrated Tax System) . 33iii. PTA (Public Transportation Assistance) System . 33e. Internet . 33f. Tax Returns . 33g. Department of State (DOS) . 35h. Information Requests . 352. Tax Research . 35Last Updated: 6/12/20123
Pa. Department of Revenue – Bureau of AuditsSales and Use Tax Audit Manuala. CCH Pennsylvania Sales and Use Tax Reporter. 35i. Law. 36ii. Regulations . 36iii. Rulings. 36iv. Revenue Pronouncements – Statements of Policy . 37v. Miscellaneous . 37b. Department and Division Resources . 37i. Office of Chief Counsel Letter Rulings . 37ii. Sales Tax Division Letter Rulings Database . 37iii. Audit Application Resources . 38iv. Board of Appeals Decisions . 38c. Internet. 38d. Field Management Staff . 383. Audit Referrals . 38a. Collateral Audits of Affiliated Companies . 38b. Other. 39c. Sales Tax Audit Potential Worksheet . 39C. CONTACTING THE TAXPAYER . 391. Audit Engagement Letter and Related Documents . 392. Telephone Contact . 403. Confirmation Letter . 404. Taxpayer Delay . 415. Agreement to Extend Time Limit for Assessment/Determination of Tax and to Extend Period of Timefor Record Retention (Waivers) . 41D. PREAUDIT CONFERENCE . 411. Preliminary Information . 422. Statement of Purpose and Request for Cooperation . 423. Business Activities . 424. Systems Survey . 435. Bureau of Audits - Registration Update . 436. Requirements for the Audit Review of Third Party Credits . 447. PA-100 Pennsylvania Enterprise Registration . 448. Discussion and Preliminary Conclusions . 459. Arrangements . 4510. Direct Payment Permit Holders . 4511. KOZ/KOEZ . 4612. Plant Tour . 46E. TYPE OF TAX – PROCEDURES . 471. Sales Tax . 47a. Gross Sales . 47i. Reported Gross Sales Per the Federal Return vs. Reported Gross Sales on SUT Return48ii. Trace and Compare the Reported Gross Sales to the Total of the General Ledger Sales48iii. Local Sales or Use Tax Exposure . 48iv. Validation of Book Gross Sales and Completeness of Records Presented . 50b. Sales Tax Accrual . 50i. General . 50ii. Converting Cash Basis to Accrual Basis. 51iii. Taxes Collected and Not Reported . 52iv. Debits to the Accrual Account . 52v. Credits Taken on the Return . 52vi. Taxes Paid on Purchases Resold . 53Last Updated: 6/12/20124
Pa. Department of Revenue – Bureau of AuditsSales and Use Tax Audit Manualvii. One Percent Discount . 53c. Taxable and Nontaxable Sales . 53i. Sales Taxed By the Taxpayer . 53ii. Nontaxed Sales . 54iii. Transaction Analysis . 54iv. Acceptance in Good Faith . 55v. Invalid or Missing Exemption Certificates . 55vi. Exemption Statements . 55vii. Missing Invoices or Source Documents . 56viii. Tax Self-assessed by Customers. 56ix. Incremental Sales Tax (Bracket System). 562. Hotel Occupancy Tax . 57a. Types of Hotel Occupancy Tax Audits . 57i. General . 57ii. Test Audits . 583. Use Tax. 58a. Use Tax Accrual . 58i. General . 58b. Capital Purchases . 59i. General . 59ii. Testing of Capital . 60iii. Missing Invoices . 61c. Expense Purchases. 61i. General . 61ii. Construction Contracts. 63iii. Missing Invoices . 63iv. Procurement Cards / Purchase Cards / P-Cards . 63d. Third Party Credits Granted in the Audit . 644. Public Transportation Assistance Taxes and Fees (PTA) . 64a. Minimum requirements . 64b. Obtaining Reported PTA Information . 65c. PTA Audit Assignments . 65i. Book vs. Reported Amounts . 66ii. Sales Subject to Taxes and Fees . 66iii. Lease Tax . 66iv. Rental Fee . 66v. Tire Fee . 68vi. Taxes and Fees Not Properly Charged By the Vendor . 68vii. Type of Examination. 685. Vehicle Rental Tax (VRT) . 69a. Minimum requirements . 69b. Obtaining Reported VRT Amounts . 70c. VRT Audit Assignments. 70i. Book vs. Reported Amounts . 70ii. Vehicle Rental Tax – Sales Transactions . 71iii. Sales Subject to Taxes VRT . 71iv. Expenses Subject to Vehicle Rental Tax . 726. Employer Withholding Of Pennsylvania Personal Income Tax. 72a. Minimum Requirements . 73i. W-2 to W-3 Reported Amounts . 73ii. Verify Withheld vs. Reported Amounts . 74iii. Verify Proper Computation of Tax Withheld . 747. Pennsylvania Personal Income Tax . 76a. General . 76i. Statute of Limitations . 76Last Updated: 6/12/20125
Pa. Department of Revenue – Bureau of AuditsSales and Use Tax Audit Manualii. Assessment . 77iii. Accessing Personal Income Tax Returns . 77b. Minimum Requirements . 77c. Required Audit Documentation . 79d. Limited Liability Company (LLC) – Filing Guidelines . 80F. CONCLUSION OF THE FIELD WORK AND SUMMARY OF AUDIT FINDINGS . 801. Summarize Audit Findings . 802. Credits Granted In Audit Findings . 81a. Credit Schedule Requirements . 81b. Supervisory Review. 81c. Verifying Prior Credits. 81G. POST AUDIT CONFERENCE . 821. Post Audit Conference Requirements . 822. Taxpayer Payments Received by the Auditor . 833. Adjustments to the Audit Findings . 84a. Reduction in the Audit Deficiency . 84b. Increase in the Audit Deficiency . 844. Post Audit Conference by Phone . 845. Inability to Schedule a Post Audit Conference . 85a. Inability to Schedule Post Audit Conference Letter . 85H. Completion and Submission of the Audit Report . 86CHAPTER 4 – PROCEDURES (EXAMINATION TYPE) . 87A. DETERMINATION OF THE AUDIT METHOD. 871. Factors in Determining the Audit Method . 88B. COMPLETE AUDIT . 89C. MODIFIED COMPLETE AUDIT . 90D. TEST AUDIT . 901. Test Audit Plan . 91a. Test Audit Plan Requirements . 922. Inclusion of Credits in the Test Period Audit Findings. 93a. Credit Schedule Requirements . 93b. Supervisory Review. 94c. Verifying Prior Credits. 94d. Documentation of Credits Granted in the Audit. 94e. Taxes Paid on Purchases Resold . 943. Type of Test . 94a. Stratified Random Sample . 95i. Record Requirements . 95ii. Selection of Stratified Random Sample Size . 96iii. Stratified Random Sample Procedures . 96iv. Application of Credits . 97v. Less Than 100% of the Audit Period Used to Select Sample . 97vi. Direct Payment Permit Holders – Formulary Method of Reporting Use Tax . 97vii. Formulary Use Tax Reporting Applications. 98b. Block Sample - Projectable Average Procedures . 98i. Selection of the Population to Be Tested. 98Last Updated: 6/12/20126
Pa. Department of Revenue – Bureau of AuditsSales and Use Tax Audit Manualii. Local Tax Consideration . 98iii. Selection of Block Sample Size . 99iv. Deviations from the Test Period Requirements . 99(1) Deviation at Taxpayer’s Request99(2) Deviations at the Bureau’s Request100v. Documentation of the Test Periods . 100vi. Records Not Available to Properly Select Test Periods. 101vii. Factors That Must Be Considered When Determining Test Periods . 101viii. Computation of the P
Pa. Department of Revenue - Bureau of Audits Sales and Use Tax Audit Manual . USE TAX AUDIT MANUAL Major Headings Table of Contents Chapter 8 - Delinquent Tax Assignments Introduction Chapter 9 - Criminal Tax Program Chapter 1 - Tax Overview Chapter 10 - Computer Assisted Audits . Effective Rate/Taxable Sales to Gross Sales Auditing .
Sales and Use Tax Audit Manual Last Updated: 6/12/2012 1 SALES AND USE TAX AUDIT MANUAL Major Headings Table of Contents Chapter 8 – Delinquent Tax Assignments Introduction Chapter 9 - Criminal Tax Program Chapter 1 – Tax Overview Chapter 10 – Computer Assisted Audits Chapter 2 – Audit Function Appendix 1 – Tax Returns Chapter 3 – Procedures (Tax Type) Appendix 2 – Audit .
Wisconsin . Sales and Use . Tax Information . Includes information regarding — 5% state sales and use tax 0.5% county sales and use tax 0.1% baseball stadium sales and use tax Publication 201 (1/19) Important Change Menominee County tax begins April 1, 2020 Baseball stadium district tax ends March 31, 2020 Outagamie County tax begins January 1, 2020
Sales Tax Sales tax – tax on purchased goods and services Tax is determined by? Paid by? Helps fund? Does your state have sales tax? A percentage added to the original price of an item 1.00 item charged 6% sales tax 1.06 Anyone who purchases an item charged with sales tax Some states don’t have sales tax Expenses of state .
The tax rate of 5% applies for both the Wisconsin state sales tax and use tax. The sales tax is based upon the sales price from retail sales. The use tax is based upon the purchase price of the product or service purchased. In counties which have adopted the county tax (see Appendix C for a list of these counties), the tax rate is 5.5%
2 Basic principles for generating a sales tax code respectively a sales tax transaction. A Sales tax code will only be generated if 2 records are available for a transaction: 1. Sales tax group 2. Item sales tax group Criteria for the Sales tax group: this is information about the customer / vendor.
The quality audit system is mainly classified in three different categories: i Internal Audit ii. External Audits iii. Regulatory Audit . Types Of Quality Audit. In food industries all three audit system may be used to carry out 1. Product manufacturing audit 2. Plant sanitation/GMP audit 3. Product Quality audit 4. HACCP audit
its sales tax from 5.95 percent to 6.1 percent in April 2019. Sales tax rates differ by state, but sales tax bases also impact how much revenue is collected from a tax and how the tax affects the economy. Sales tax rate differentials can induce consumers to shop across borders or buy products online. FISCAL FACT No. 737 Jan. 2021
Creating an icon button This example will be using the class md-icon-button, which must be applied to in order to get an icon button. It is also recommended to add an aria-label attribute to for accessibility purpose or the ARIA provider will throw a warning that there is no aria-label. Usually, there is an element in the attribute.
