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Five Common Errors Discovered in Oklahoma Sales Tax Audits

March 13, 2024

Is Your Business at Risk?

Sales tax audits can quickly add up. A common misconception is that sales tax assessments are often associated with taxpayers trying to avoid paying sales tax. However, even businesses that are careful and have robust sales tax systems can face assessments due to unintentional errors. Small errors, while seemingly insignificant on their own, can become substantial when spread over months or years. 

Additionally, many taxpayers are uncertain about their CPA's role in managing their business's sales tax as it is often explicitly excluded in the engagement letter for the annual tax return. It is essential to conduct an annual checkup on sales tax issues with your CPA to identify potential risks with sales tax reporting. Early detection of errors allows for corrections to be made to the sales tax system to minimize the risk of sales tax audits in the future. 

According to Deeanne Nunn, CPA, an OSCPA member and sales tax audit supervisor with the Oklahoma Tax Commission, the five most common mistakes found during sales tax audits are:

  1. Not reporting all sales
  2. Insufficient documentation for exempt sales
  3. Failure to pay use tax on out-of-state purchases
  4. Not charging sales tax
  5. Not charging sales tax on sale of business assets

Learn more about each of the most common mistakes found during sales tax audits on the Oklahoma Tax Commission's website.