A Virginia sales and use tax audit is a review of a company’s sales, purchases, expenses, and tax records to determine whether the correct amount of Virginia sales or consumer use tax was reported and paid. The auditor may examine sales and expense invoices, resale and exemption certificates, asset purchases, Virginia sales and use tax returns, and other financial documentation.

MARSU Associates provides specialized sales and use tax audit assistance to companies doing business in Virginia. Marsu’s owner is a former sales tax auditor with more than 45 years of experience in sales and use tax matters.

Virginia sales and use tax laws can be complicated and subject to change. An experienced Virginia sales tax consultant can review the audit findings, explain how the rules apply to the business, identify questionable assessments and help present documentation to the Virginia tax authorities.

Yes, MARSU Associates can assist at any stage of a Virginia sales and use tax audit process. This includes responding to audit questions, reviewing audit line items and projection methodologies, analyzing and documenting proposed adjustments, working directly with the auditor in providing documentation challenging disputed transactions and issues, and helping the company through the remaining audit process.

Virginia consumer use tax applies when a business purchases taxable goods or services without paying the required Virginia sales tax to the seller. Even though the seller did not collect the tax, the Taxpayer is required to self-assess the tax and remit it directly to the Commonwealth of Virginia on their sales and use tax return. These untaxed transactions are usually found in the test sample period in the expense audit and the actual audit of the asset purchases for the entire audit period and will result in additional tax, interest or penalties.

Yes, MARSU Associates has experience reviewing Virginia consumer use tax audits. Marsu can evaluate purchases, expenses, assets and vendor transactions to determine whether consumer use tax was properly calculated and whether the proposed assessment fairly reflects the company’s liability.

A normal three-year statute of limitations may be extended to six years if a false or fraudulent return has been filed or the Taxpayer failed to file a return and reasonable cause exists that the Taxpayer was required to file a return. MARSU Associates can help businesses collect and review the necessary documentation, evaluate potential exposure and respond to issues involving the extended audit period.

Virginia auditors may examine transactions from a sample period and project the results across the full audit period. MARSU Associates reviews the sampling and projection methodologies used for sales and expense assessments to determine whether the calculations fairly represent the company’s actual tax liability.

A Virginia sales and use tax assessment may be reduced when a detailed review identifies incorrectly classified transactions, unsupported projections, valid resale or exemption certificates, tax previously paid, invoices not previously provided or other documentation supporting disputed transactions. Every result depends on the company’s records and individual circumstances.

Yes, MARSU Associates reviews sales and use tax records for potential overpayments and available refund opportunities. For a Virginia sales and use tax audit, the Taxpayer is only allowed to submit use tax improperly paid as a refund directly to the Commonwealth of Virginia against the audit. Any sales tax improperly paid to a supplier must be filed with the supplier and refunded by the supplier with proper documentation.

MARSU’s owner previously worked as a sales tax auditor and has extensive knowledge of Virginia sales and use tax laws, audit procedures, sampling methods and assessment projections. They deal with sales tax audits regularly and maintain professional working relationships with auditors, supervisors and hearing officers.

An accountant may have extensive experience with federal and state income taxes but may not specialize in Virginia sales and use tax audits. Because sales tax laws and rules, exemption requirements and audit projection methods are highly specialized, a dedicated Virginia sales tax consultant can provide knowledge focused specifically on these matters.

Legal representation may be appropriate in certain situations, particularly when there is litigation involved. However, most Virginia sales tax audits just require detailed knowledge of taxable transactions, consumer use tax, exemptions, sampling and audit procedures. Businesses should consider whether the professional they choose has direct Virginia sales and use tax audit experience.

MARSU Associates has assisted hundreds of companies with sales and use tax matters since 1981. MARSU Associates is a registered authorized agent with the Virginia Department of Taxation and can quickly assist with a current sales and consumer use tax audit. The firm focuses on helping businesses lower assessments to the lowest supportable amount and identify any available refund opportunities.

No, MARSU Associates helps companies that are doing business in Virginia, including businesses headquartered outside the Commonwealth that may have Virginia sales or consumer use tax responsibilities.

A business should consider contacting MARSU Associates as early as possible after receiving an audit notification letter. Assistance can even be provided after audit workpapers or an assessment notice has been issued, before an informal hearing or VA Tax Court. The earlier the help is requested, the better. Early review can help identify exposure, organize documentation and prevent avoidable errors. It is much easier to work with the auditor and supervisor in the field than when you go to the informal hearing and VA Tax Court. The audit staff has their own guidelines and policies that they follow, and documentation to get items removed from the audit workpapers is less stringent. After the audit notification letter is received, MARSU Associates is willing to just discuss the audit process with the Taxpayer and direct the Taxpayer in providing the information requested by the auditor, thus saving the Taxpayer time and money and avoiding errors that might have occurred otherwise.