What role do SALT audits have in helping states generate revenue?
If the state finds that you are not in compliance with its taxes, it will issue an assessment for unpaid or underpaid tax liabilities. These taxes, which would be additional revenue for the state, would not have been identified if you were not audited. For companies, states generally target income and franchise taxes, sales and use taxes, and personal property taxes. For companies that are meeting their tax filing obligations, the state will attempt to identify additional revenue by scrutinizing other areas. You may take a tax position that the state doesn’t agree with or fail to collect sales tax or pay use tax on certain types of transactions. If a filing obligation exists and tax returns have not been filed, many states may audit a period of up to ten years, although this varies from state to state. You would be responsible for back taxes and extensive interest and penalty charges. What should you expect during a SALT audit? You need to be prepared. You should perform an internal re
