Conducting An Audit

The business owner is responsible for reporting and remitting the appropriate City Transaction Privilege (Sales) and Use taxes. Your business may be selected for an audit of such taxes. The audit generally covers the most recent four year period, but may include the most recent six year period if the gross receipts are understated by 25% or more. Also, an audit may extend to previously non-audited periods where no return was filed or fraudulent returns were submitted.

The audit can be conducted at your business location, at the city offices or at a mutually agreeable location, such as an accountant or bookkeeper office, during normal business hours. If you desire the Auditor to work directly with your accountant, bookkeeper, lawyer, or other representative, then you will need to complete a power of attorney form. (You can download Arizona Form 285 from the Arizona Department of Revenue.) Business owners are responsible for payment of additional taxes, interest, and applicable penalties that are identified during the audit.

In the event your business is selected for an audit, the audit will encompass all business locations within the State of Arizona and will be conducted to examine taxes owed to the State of Arizona, the County or counties and city or cities involved. If you have multiple locations, the scope of the audit would cover the most recent four year period for all jurisdictions.