Rewards of Merit: Sales and Use Tax

Recovering Overpaid Sales and Use Taxes for E&P Firm

Client:

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

Results for client

$2M+

Continued Annual Tax Savings

$1M

Saved in local taxes with Direct Pay Permit

Challenge:

  • Client had no process in place to ensure sales/use taxes were paid properly on capital expenditures and lease operating expenses. Client also had no in-house staff to handle on-going compliance.

Merit Action Plan:

  • Merit performed a reverse audit of past expenditures and identified a significant amount of overpaid Louisiana and Texas sales and use taxes.

  • Merit identified some exposure for the Client therefore recommended initiating Voluntary Disclosure.

  • Merit recommended outsourcing the monthly compliance and obtaining a Texas direct pay permit to ensure the lowest tax rate is due on large purchases Agreements with the State.

  • Merit also provided training for purchasing, engineering, and payables to ensure the company was aware of the errors, changes to the process and how to mitigate the errors in the future.

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