Explaining The State Of Maryland’s Sales Tax Audit Program Part 1

This country places a high emphasis on the value of starting your own business and building it from the ground up. Rolling up your sleeves and putting in the effort to achieve success helps to make the United States great. While this attitude inspires gusto, many small business owners are struggling with their tax liabilities on a yearly basis. Modern tax law is a complex and intricate system that aims to deliver accurate assessments to businesses when dealing with state and local taxes. While the notion of our tax system is novel, the truth is that the complexity of this system often wreaks havoc on businesses who are either misinformed or simply unaware of their tax indiscretions.

JDKatz is proud to be your go-to team of tax attorneys in Maryland and Washington D.C., delivering tax advice and legal representation to all of our clients. Whether through neglect or misinformation, many of the clients we speak to are facing tax evasion penalties of all types. One aspect that may have major implications on your operations is a sales tax audit. Today, we’ll take a cursory look into Maryland’s Sales Tax Audit Program and the implications of its operations. If you are in need of comprehensive tax representation, be sure to contact our legal team today for assistance.

Maryland State Audits are More Common

The chances of your business being audited by the IRS is fairly low. More often, though, we are called by clients who are receiving an audit from Maryland. The state is focused on sales taxes, mainly because theses taxes account for a third of Maryland’s revenue. Unfortunately, the complexity surrounding these laws makes it a challenge for local businesses to clearly document and identify their sales and uses taxes. The Maryland Comptroller’s Office is actively engaging in tax audits across the state, making it essential for businesses to properly keep track of all their expenditures and tax liabilities.

While your business has a higher chance of being audited, the state has decreed its focus on four industries, including:

  • Government contractors
  • Multi-state businesses
  • Security services
  • Commercial cleaning and janitorial services

There Are Numerous Auditors Who are New

With a steep rise in audit cases and a focus on investigating businesses statewide, the quality of the auditor in charge of your case may not be up to the industry standard. Auditors are required to know about accounting and bookkeeping practices, yet they are not required to hold a Certified Public Accountant certification. This discrepancy play a large role in your audit. Our certified tax lawyers have the experience and expertise to assist your case when this occurs to aim for a very beneficial outcome.

Maryland Imposes a Use Tax

While your company’s sales are essential throughout the audit process, one aspect that many people are unaware of is the fact that Maryland places a tax on all items that are coming into the state. If you have bought tangible goods out of state, be sure to have a system for accounting for the sales tax associated with the purchase. This section of tax law is ambiguous at best, leaving ample room for error on both sides. Our experienced tax experts can help you simplify this process and keep accurate reports on both your sales and use taxes.

When facing a tax audit for your business, it is essential to find a quality tax attorney in Maryland that knows every facet of this complex system. Hiring a certified tax lawyer may prove to be a wise choice when dealing with the state and its audit program. Next time, we’ll continue on this subject by discussing the intricacies of Maryland’s tax audit program and how its legal ambiguities may hurt your business. It’s important to find legal representation that can help your defense when an audit is on the line.

Anyone in need of expert legal advice when dealing with tax evasions or audits can benefit from contacting JDKatz. Our team of tax attorneys will work hard to provide the best possible services for your case, simplifying the complexity of our tax laws and optimizing your outcome in the process. With decades of combined experience, we’re able to confidently personalize our services to perfectly match your needs. Contact us today to learn more about our tax services or to schedule your appointment.