We are working on streamlining our corporate card expense submission process with regards to the submission of receipts for expenses under $25.

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Q. (con't.)

Our concern is proof needed for sales tax. If no receipt, how does the company assure that required sales tax has been paid? What documentation is used if audited by a state?

 

A.

The best approach is to start with the P-card report. For all suppliers who submit level 2 and 3 data, the sales tax is reported. Now you only have to deal with having the receipt for level 1 suppliers. State tax departments do use the P-card statement or invoice as evidence. If you don't provide one or the other, you could be charged the tax again. Depending on your volume, however, there's not a lot of exposure for items under $25.00.

For example, for an invoice for $25.00 with 7% tax, sales tax is $1.75.

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