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Audit Procedures for Cigarette Tax
Appendix – Statute, Rules and Examples
- Summary of Reported Amounts of Cigarettes and Stamps:
- This is a spreadsheet that allows a rolling view of the cigarette distributors monthly reporting from beginning of audit period to the last period under audit. Reporting by period is completed by the auditor for reported beginning inventory, purchases, deductions, ending inventory allowing a period by period view of the value of the cigaretes stamped for sale in Texas by a distributor, this is compared to the reported value of the stamps affixed to cigarette packs. An under/over reporting result allows the auditor to see inconsistencies in period by period reporting.
- Stamp Reconciliation Schedule:
- This is a spreadsheet the compares the cigarette stamp purchases as reported by the cigarette distributor to Audited State Stamp Sales as reported from the Cigarette Stamping Program download of cigarette stamp purchases by the cigarette distributor under audit. There are two sections for the two different stamp values for cigarettes. Stamps for 20 stick packs and also for 25 stick packs. Only the stamp count, not value is part of this spreadsheet.
- Inventory Verification Form (2-page form):
- This spreadsheet is often completed by hand in the field at the conclusion of an inventory of the unstamped cigarettes on hand and an inventory of the stamps onhand. The taxpayer and auditor sign the inventory and it becomes part of the audit documentation.
- Cigarette Transaction Summary:
- This spreadsheet is often completed by hand in the field at the conclusion of an inventory of the unstamped cigarettes on hand and an inventory of the stamps onhand. The taxpayer and auditor sign the inventory and it becomes part of the audit documentation.
Note: The examples shown in the Appendix are a guideline and may be adapted when necessary.
(Revised 09/2010)