Rewards of Merit: Sales & Use Tax

Defending a Midstream Giant Under Audit


A large, publicly traded midstream energy company, engaged Merit for audit defense and use tax compliance review.

Results for client


Reduction in Audit Liability


Eliminated Tax Exposure


  • Client faced a $9million use tax liability from a single state of Texas audit.
  • Ineffective compliance program mis-accrued $6 million in use tax on non-taxable transactions and failed to remit any of it, resulting in exposure.

Merit Action Plan:

  • Defended the audit and reduced liability through robust research and careful coordination in gathering and presenting support for qualified exemptions.

  • Reviewed the unremitted tax to quantify the actual amount and remit it to the correct jurisdiction.

  • Developed a new use tax compliance process to reduce exposure going forward.

More Rewards of Merit