Sales Tax Audit Triggers to Avoid

Actions that can spark a sales tax audit

There are many actions that can spark an inquiry or audit. In the infographic below, we cover many of these actions, which include an excess number of exempt sales, a significant increase or decrease in sales, math errors, and refund requests:

Avoid “red flag” mistakes

While some states select companies randomly for audits, most audits are triggered by red flags, such as filing a late return, paying one type of tax but not registering for sales tax, and experiencing a drop in taxable sales.

By recognizing these red flags, you can take steps to reduce your likelihood of audits.