Sale taxes are supposed to be collected at the time of sale by the seller, who then reports and submits the sales tax to the Franchise Tax Board. If sales tax is not collected when it should be, the seller can be liable to the State for unpaid sales tax.
Numerous issues arise in regard to whether a sale is taxable, the correct amount of the tax, and proper reporting of sales tax. The FTB audits businesses to determine if the business has property reported and paid all required sales tax. Audits can result in very sizeable tax assessments.
It is best to obtain representation by qualified attorneys and accountants before the audit begins. Your books and records should be reviewed by your own representatives first. Then your representatives can meet with FTB auditors to answer the auditor’s questions and provide them the necessary documentation.
We represent taxpayers in sales tax cases. We have accountants available who previously worked with the FTB and are extremely familiar with the accounting issues for sales tax audits.