Department of Taxation and Finance

Sales Tax Distribution Process

Vendors submit their sales tax collections to the Department of Taxation and Finance, and the Department distributes the local portions of the tax revenue to the appropriate localities. We audited the accuracy of the complex local distribution process and found that local distributions of sales tax revenue are reasonably correct. However, certain improvements can be made in the Departmentís processing of sales tax returns, as errors affecting the local distributions are not always detected by the Department. We also found that assessments were not always issued promptly to vendors for underpayment of taxes or late filing of tax returns. We recommended that certain additional error identification practices be adopted by the Department, and action be taken to expedite the issuance of assessments.

For a complete copy of Report 2003-S-51 click here.
For a copy of the 90-day response click here.
For a copy of the associated follow-up report click here.