Rewards of Merit: Sales and Use Tax

Multidisciplinary Solutions for Midstream Saves Millions

Client:

Based on the results of Merit, we are now the Client’s trusted business advisor.

Results for client

$2.9M

Tax Penalty and Interest Savings

$22M

Reductions to Four Audit Assessments & Overpaid Sales & Use Taxes

Challenge:

Client had multiple sales/use tax audits and no staff available to help manage the process. Client was also aware of a significant amount of overpaid taxes that needed to be identified and captured and included in the audits.

Client implemented a third-party software solution and had several “suspended transactions” for which the system could not process and needed a review to ensure the taxes were calculated and paid correctly.

Client also identified a significant amount of use tax exposure related to a few large pipe purchases for which no tax had been paid.

Merit Action Plan:

Merit represented the Client related to four sales/use tax audits and reviewed each audit for overpaid sales/use taxes.
Merit supplied the technical expertise to “fix” the implementation of the third-party software package to ensure the suspended transactions were taxed correctly.
Merit negotiated with two states to Voluntary Disclosure Agreements (“VDA”) to mitigate some of the tax, penalty, and interest due.

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