taxes

Auditing Fundamentals

Appendix

• Tax Chart
• Sales and Use Taxes
• Franchise Taxes
• Motor Fuels Taxes
• Minerals Taxes
• Hotel Taxes
• Motor Vehicle Taxes
• Miscellaneous Taxes
• Pari-Mutuel Wagering
• Petroleum Product Delivery Fee
• Controlled Substance
• Battery Sales Fee
• Automotive Oil Sales
• Cigarette/Cigar
• Insurance
• Mixed Beverage
• Reasons for Assignment
• Audit Flowchart Timelines

Tax Chart

1. Due date for all the sales taxes is: 20th of the month. If the 20th is a weekend or holiday, the due date is the next working day.
2. Discount for timely filing: 1/2%
3. Late returns are assessed a 5% penalty for 1-30 days late, and an additional 5% if over 30 days late. Minimum penalty is $1 per period. Interest is assessed beginning 61 days after the due date. Interest rate varies annually, set at one percent over the prime rate as published in the Wall Street Journal on the first business day of the year.
4. Refund claims filed by a taxpayer on or after September 1, 2005 will accrue credit interest at either the Treasury Pool rate or Prime +1%, whichever is less. For refund claims filed prior to September 1, 2005, credit interest will accrue at Prime + 1%.
5. For credits due on audits, if the entrance conference is prior to September 1, 2005, the credit interest rate will accrue at the Prime plus 1%: if the entrance conference is on or after September 1, 2005, credit interest accrues at either the Treasury Pool rate or Prime + 1%, whichever is less.
6. For a complete listing of all the cities, counties, SPDs, or Transits and their applicable tax rates, please see Publication #96-132 - Texas Sales and Use Tax Rates
7. The Texas Emissions Reduction Plan Surcharge is due on the sale, lease, or rental price heavy-duty, of off-road diesel-powered equipment. The surcharge is in addition to the sales & use tax due; however, if the sale, lease, or rental of the equipment is not subject to sales tax, the surcharge is not due.

Notes:

1. Gasoline - due date: 25th of month following end of previous month for distributors, and the 25th of month following the end of the quarter for interstate truckers, or 25th of January for the previous year if annual filer
2. Gasoline - discount: 2% of taxable gallons for distributors. 1/2% of taxable gallons for interstate truckers. Timely filing is not required for discount.
3. Liquefied Gas - due date: 25th of January after each calendar year
4. Liquefied Gas - discount: A permitted dealer retains 1% of the tax on the taxable gallons and an interstate trucker is entitled to 1/2% of the tax on the taxable gallons
5. Diesel Fuel - due date: 25th of month following end of previous month for suppliers and 25th of month following end of quarter for interstate truckers and bonded users. Certain bonded users and interstate truckers may report annually.
6. Diesel Fuel - discount: 2% of taxable gallons for suppliers. 1/2% of taxable gallons for interstate truckers and bonded users.
7. IFTA is reported quarterly by the last day of the month following the end of the calendar quarter. Interstate carriers based in Texas report fuel tax paid in all member jurisdictions.

Notes:

1. Crude Oil Production
   • Producers who do not pay the production tax are required to file only an annual report, which is due on or before March 1st of each year. All others are required to file monthly returns.
   • Special lower tax rates apply for wells located in new or expanded enhanced recover sites. Please consult Sections 202.056 and 202.059 of the Oil Production Tax Statute for those rates.
2. Natural Gas Production - producers who have an average monthly tax liability of less than $200 must file an annual producer's report, which is due on or before February 20 of each year. If the producer's cumulative annual liability exceeds $2,400 at any time during the year, he is required to begin filing monthly returns at that time. Natural gas classified as high-cost natural gas is exempt from the gas production tax.

Only state taxes are administered by the Comptroller

1. Motor Vehicle Gross Rental Receipts - there is an additional 1.25% discount of the estimated tax if a prepayment is filed by the 15th of second month of quarter.
2. Motor Vehicle Sales & Use (County Tax Assessor) - County Tax Assessor-Collector must report all tax and penalties collected, less a 5% commission. Due date: deposits are due either the 10th of the month, or weekly, or daily, depending on the volume of taxes collected. Penalty and interest is not assessed on any audit deficiency.

                    Assessment Period:             Due Date:
                    July, Aug, Sept                Nov. 15
                    Oct, Nov, Dec                  Feb. 15
                    Jan, Feb, Mar                  May 15
                    April, May, June               Aug. 15
                    Annual (July of prior year     Aug. 15
                    - June of current year)

1. Boat & Boat Motor Sales & Use Tax is paid to either the local County Tax Assessor-Collector or the Texas Parks & Wildlife Department
2. The mixed beverage tax is imposed on the person or organization holding the mixed beverage permit and not the customer. It may not be added to the selling price as a separate charge and may not be backed out from the amount received.

Reasons for Assignment

• Additional Info Supplied by TP
• Admin. Tax Policy Change
• Associated Insurance Group
• Audit Lead Card
• Audit Select Query
• Bankruptcy
• Certificate of No Tax Due (NTD) Request
• Certificate Related Issue
• External Source
• Final Audit Request
• Headquarters Select
• Incorrect Tax Rate Charged
• Informant Program
• Lead from an Audit Assignment
• No Tax Charged
• Not Permitted
• Operating from Open Register
• Other - See Comment
• Prior Productive Audit
• Priority I Audit
• Refund Request
• Resale or Exempt. Certificates
• Results of a Court Case
• Results of a Hearing
• ROP Project
• Taxpayer Request/Complaint

Audit Flowchart Timelines

This flowchart is intended to show how an audit flows from the time the audit is generated, to the time when the audit is completed and leaves the audit office.

A detailed explanation of all the items in the flowchart is discussed in the various chapters of this manual.

View alternate text for Audit Flowchart Timelines.

TOC | Preface | 1 | 2 | 3 | 4| 5 | 6 | 7 | 8 | 9 | 10 | Appendix | Glossary | Timelines

(Revised 10/2021)