§ 3.20.330. Sales tax audits.

A.

Any seller who is required to collect and remit sales tax, or who is required to submit a sales tax return under the provisions of this chapter, is subject to a discretionary sales tax audit at any time. The purpose of such an audit is to examine the business records of the seller in order to determine whether appropriate amounts of sales tax revenue have been collected by the seller and remitted to the municipality.

B.

The finance director shall be responsible for directing that sales tax audits take place and for selecting the particular sellers whose business records will be audited.

C.

Sales tax audits of seller's business records may be accomplished by either an employee of the city finance department or by an individual or firm under contract with the city.

D.

Sellers selected for a sales tax audit will be notified by letter and will be required to meet with the finance department employee or contractor conducting the audit, and make available for inspection, examination and copying all pertinent business records including income tax returns that may be requested for the prior three fiscal years, within thirty days of notification. Under extenuating circumstances, the finance director may grant an extension of time for compliance at the director's discretion.

E.

After completion of a sales tax audit, sellers subject to the audit will be notified of the results of the audit by letter. If the audit has resulted in an additional sales tax liability to the city, the additional sales tax must be remitted to the city within fourteen days after the receipt of the letter, or the additional sales tax will be considered delinquent and subject to the procedures on delinquencies outlined in this chapter. If the audit has resulted in a refund due the seller, the refund will be made to the seller within fourteen days, or applied to the seller's account, at the seller's option.

F.

It shall be the seller's responsibility to maintain business records in sufficient detail to substantiate all information reported on sales tax returns, including sales qualifying as retail sales exempt from taxation under the provisions of this chapter. If insufficient detail exists within a seller's business records to substantiate retail sales exemptions, such sales may be reclassified as taxable sales at the auditor's discretion and subject to sales tax collection and remittance.

G.

Any seller notified of an additional sales tax liability as a result of a sales tax audit shall have the right to appeal the additional liability to the city manager. Such an appeal must be filed with the city clerk within thirty days of notification by letter of the liability. If an additional liability is appealed, the accumulation of penalties and interest under the provisions of this chapter will be suspended on the date the appeal is filed with the city clerk; if the appeal is subsequently denied by the city manager, all such penalties and interest will be retroactive back to the original date of notification of additional liability by letter.

H.

Any seller refusing to comply with the provisions of this section shall be subject to any or all of the procedures on delinquencies as set forth in this chapter, including the filing of a civil or criminal complaint against the seller.

(Ord. 04-10 § 2 (part), 2004).