Do you know what is taxable at your convenience store or gas station? Do your decisions on back-office and point-of-sale (POS) tech matter? Of course they do.
Make no mistake, the Texas Comptroller’s office understands that many back-office and POS systems can group items. They also know that some POS systems (cash registers) can be more rudimentary providing the cashier with keys to enter whether an item is taxable or non-taxable.
Depending on how your back-office and POS systems are setup will surely determine how they approach your audit.
Using POS Tax and Non-Tax Keys
The Texas Comptroller knows that when you use tax and non-tax keys, you are relying greatly on the cashier’s knowledge, proper training, and error-free entries. Because of this, they may use tests to determine:
- Your knowledge as to which items are taxable and which are exempt from tax
- What guidelines or information have been given to the cashiers to determine taxability
- Your exact sales tax reporting procedures
In addition, they may:
- Trace the postings of taxable sales and tax collected from cash register tapes to summary records and to the tax returns
- Verify the reliability of this procedure by comparing it to the results of the application of the purchase ratio method, at least on a preliminary sample basis
The Difference with Back-Office and POS Systems
Although worded a bit differently than you would expect in the tech world, the Texas Comptroller understands the fundamentals of more sophisticated POS technology and its integration with back-office systems. Their approach, in this case, seems much simpler.
An audit of a taxpayer using the “product code” system may be limited to:
- Verification of the correct internal coding for taxable and nontaxable items;
- Verification of summary records generated by the system; and
- The inclusion of all receipts for report periods.
Every retailer needs to determine the cost-benefit of investing into POS-enabled back-office technology. This is just one example of how this automation helps c-store and gas station retailers.
As a gas station or convenience store owner, you most likely have this technology somewhat or entirely available to you so make sure you leverage it.
Have questions or comments? Leave them below!
