Tourist Development Tax Audits
Purpose of an audit
The purpose of an audit is to ensure that the tourist development tax is uniformly enforced, deter tax evasion, promote voluntary compliance, and educate the taxpayers in the correct method of reporting. While most tax returns are accepted as filed, returns are audited to verify accuracy and evaluate compliance. The audit may or may not result in additional tax due or may disclose that a refund is due.
How a taxpayer is chosen for an audit
The majority of our audits are random. The rest are either referrals from our collection department for habitually filing late returns, incomplete tax returns, etc. or referrals from the Florida Department of Revenue.
All tax returns are subject to an audit. A Notice of Intent to Audit is sent to the taxpayer informing him or her of the impending audit and giving 60 days notice before scheduling the audit. The audit must begin within 120 days following the notice. In addition to the notice informing the taxpayer of the audit period, there is also an audit exhibit attached specifying the financial records that will be reviewed. The audit exhibit is not an all inclusive list. There may be additional records requested once the audit begins.
- Florida Department of Revenue Sales Tax Returns (DR-15)
- General Ledgers
- Chart of Accounts
- Financial Statements
- Occupational License
- Loan Applications
- Federal Income Tax Returns
- Franchise reports and agreements, if applicable
- Exemption Certificates and the corresponding folios
- Monthly Bank Statements, deposit slips
- Leases, if applicable
- Resale Certificates
- Register Tapes, if applicable
- Housekeeping Records
- Guest Folio/Registration Cards/Guest Applications
- Cash Receipt Records (Daily/Monthly Posting)*
- Monthly Utility Statements
- Daily Report (posted by hand or computer generated)
- Daily Audit Packs (daily close out by Night Auditor)
- Monthly Sales Tax Reports (Realtor/Agent)
- Monthly Owner Statements (Realtor/Agent)
- Rental Confirmations (Realtor/Agent)
- 1099’s, 1042’s if applicable
- Other – any and all documents needed to complete the audit
Cash receipts records may be known under such names as: cash receipts summary, daily report, activity report, G/L worksheet, daily logs, etc.
Pursuant to Section 118-31, Pinellas County Code, only records, receipts, invoices, and related documentation, that are available to the auditor when such audit begins, shall be deemed acceptable for the purposes of conducting such audit.
Any person who collects rental charges for short-term accommodations must maintain adequate records, including copies of all leases, rental agreements, duplicate copies of receipts issued for the payment of rental charges.
All records must be available in Pinellas County during an audit. Records must be maintained for three years. Pursuant to F.S. Chapter 212, in the absence of records, an assessment may be issued from an estimate based upon the best information available, which shall be considered prima facie correct, and the burden to show the contrary shall rest upon the owner or the owner’s representative.
If there are insufficient records available or no records, an assessment may be issued based upon the best available information.
A Power of Attorney Form will be needed if the owner wants us to talk with his accountant, attorney or bookkeeper about his tourist development tax account.