Rewards of Merit: Sales & Use Tax

Addressing an Operator's Overpayments Holistically

Client:

A large, independent oil and gas operator in Colorado, engaged Merit to review its sales tax compliance after a key official left the company.

Results for client

$4M

Refund Claim Filed

90% -> 20%

Reduction in Number of Purchases Paying Sales Tax

Challenge:

  • Considerable institutional knowledge was lost when the official overseeing sales tax compliance departed.
 
  • Matrix for calculating sales tax payments had not been maintained.

Merit Action Plan:

  • Reviewed two years of purchase transactions including approximately 20,000 invoices.

  • Discovered the client was unnecessarily paying sales tax on most of its purchases.
  

  • Provided a uniquely holistic solution:

    • Phased out unnecessary sales tax payments.
    • Quantified past overpayments.
    • Took steps to ensure long-term compliance.

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