Laserfiche WebLink
EXHIBIT A <br />SCOPE OF WORK <br />Sales, Transactions And Use Tax Audit Services (SUTA) Services <br />In performing the sales, transactions and use tax audit program MuniServices shall: <br />1. Identify and correct the sales/transactions/use tax reporting errors of businesses that, based on the nexus <br />of their activities, are not properly registered with the City. <br />2. Identify and correct the reporting of businesses that are improperly reporting tax to state and county pools <br />(i.e. classifying sales tax as use tax) and thereby depriving the City of sales tax revenue. <br />3. Detect, document and correct sales/transactions/use tax reporting errors/omissions and thereby <br />generate new, previously unrealized revenue for the City. <br />4. Ensure through comprehensive audit measures that the revenue information used for ongoing economic <br />analysis includes all sales/transactions/use tax generators. <br />5. Assist the City with strategies to preserve and even enhance sales and use tax revenue generated by <br />existing businesses within the City. <br />MuniServices' proposed sales/transactions/use tax allocation audit services for the City includes five distinct <br />types of audits: <br />o Taxable Nexus Field audits <br />o Permifization audits <br />o Deficiency assessment audits <br />o Accounts payable audits <br />o Quarterly Distribution Report audits <br />Taxable Nexus Field Audits <br />MuniServices' initial and periodic taxable nexus field audits include a physical canvassing and evaluation of <br />sales/transactions/use tax generating businesses located in the City. In the absence of this undertaking, <br />significant misallocations will remain undetected. MuniServices' field audits focus on those businesses located <br />in the City from which the City has not been receiving sales/transactions/use tax revenue. <br />Permitization Audits <br />Wholesalers, contractors, processors, manufacturers and other non -retail businesses will frequently not have a <br />sales tax permit properly registered to the City in which they are located because their business operations do <br />not include a point-of-sale qualifying activity. However, these companies will often generate local <br />sales/transactions/use tax from the State Board of Equalization (BOE) audit deficiency assessments, occasional <br />sales (i.e., mergers and acquisitions), and self -accrual of use tax on purchases. MuniServices' field audits <br />facilitate the identification and correction of improperly registered permits for companies having point-of-sale <br />operations in the City. <br />Deficiency Assessment Audits <br />When the California BOE audits taxpayers for sales/transactions/use tax compliance, it not uncommon for the <br />taxpayer to receive a substantial deficiency assessment due to underpayments and/or under -collections. In <br />many cases, the local allocation portion of the deficiency assessment is distributed in error to the State pool, <br />county pools, or other jurisdictions. Accordingly, MuniServices has developed proprietary criteria and techniques <br />to detect and correct BOE deficiency assessment misallocations and thus expand the benefits produced by <br />MuniServices' allocation audit service. <br />25F-9 <br />