E-commerce sellers can face Texas sales tax audits whether they are based in Texas or elsewhere in the United States or around the world—and these audits can pose substantial risks. For e-commerce sellers that are not in compliance, these audits cannot only lead to substantial sales tax liability but also […]
Companies that provide software as a service (SaaS) and other digital services to customers in Texas must ensure that they comply with the state’s sales tax laws. While many services are exempt from sales tax under Texas law, SaaS and certain other digital services are not. Since noncompliance with Texas’ […]
Like other out-of-state businesses, out-of-state contractors working in Texas must comply with the state’s sales tax laws. Out-of-state contractors may need to collect and remit Texas state sales tax in various circumstances, and their failure to do so can create exposure to liability for back taxes, interest, and penalties. This […]
In the vast majority of cases, Texas sales tax audits are civil inquiries that present the risk of facing monetary penalties but not the risk of incarceration. However, these inquiries can turn criminal in some cases. The Texas Comptroller’s Criminal Investigation Division (CID) investigates suspected tax evasion and tax fraud, […]
Out-of-state sellers may be subject to Texas sales tax liability under various circumstances. For those required to collect and remit sales tax (including state and local sales tax), compliance must be a priority. Not only can noncompliant sellers face liability for back taxes, interest, and civil monetary penalties, but, in […]
When facing a Texas sales tax audit, understanding why can be important for building an informed defense strategy. While businesses should take a proactive approach to defending against state sales tax audits in all scenarios, if an audit is targeted—meaning that it is based on suspicion of noncompliance—this can present […]
For businesses targeted in Texas sales tax audits, allegations of noncompliance can lead to liability for more than just the business’ unpaid sales tax liability. Businesses that have not fully satisfied their sales tax obligations can also face liability for interest and penalties. This additional liability can be substantial. Along […]
When conducting sales tax audits, the Texas Comptroller’s Office has the ability to use sampling rather than conducting a comprehensive review of an audit target’s sales tax payment history. While this might initially seem like a good thing—as it helps streamline the audit process—the reality is that sampling can present […]
Successfully defending against a Texas sales tax audit can be a substantial undertaking. The time, effort, and resources involved can become even more substantial if the Texas Comptroller’s Office expands the scope of the audit after it starts. This is a very real possibility, and it can happen for multiple […]
Auditors have broad authority to request access to businesses’ financial records during Texas sales tax audits. But does this extend to a business’s entire general ledger? After all, a general ledger is an extensive document that contains enormous amounts of sensitive information—including information that is in no way related to […]