Below you will find the most frequently asked questions (FAQs) related to audits conducted by the Department of Business License and transient lodging guidance (commonly referred to as "room tax").
There are three possible outcomes to an audit.
First, an audit may result in a notice that taxes and/or fees were properly remitted and no payment or refund is due.
Second, an audit may result in a notice that a refund of overpaid taxes and/or fees are due back to the business.
Third, an audit may result in a notice that additional taxes and/or fees are due from the business.
The Department’s conduct of audits is very important to the public interest and the efficient administration of the self-assessed business license taxes and fees.
Audits help ensure that taxes and fees are administered in a fair and uniform manner throughout the business community.
Audits provide businesses with enhanced understanding of the business license laws so they can more accurately self-assess taxes and fees and better comply with the business license regulations.
Audits often result in the early detection of matters requiring attention or correction by a business before they become a more significant problem.
At the conclusion of every audit, businesses have an opportunity to provide written feedback to the department regarding the conduct of the audit and any issues or concerns that may have arisen as a result of the audit.
The auditor will inform you which licenses are being audited and the periods to be examined for each license.
The type of records required for an audit will vary depending on the type of license audited. For transient lodging tax audits, please see Clark County Code Section 4.08.085 for a complete list of documents required.
For flat fee licenses that are based on a number of units, an accurate accounting of those units throughout the audit period will be required.
For gross licenses, your auditor will discuss the records requirement with you when the audit is scheduled. This discussion will allow the auditor to create a list of required documents that is tailored to your business and accounting system. As a general rule, however, the following types of documents will be required:
- Copies of license renewal forms with supporting worksheets, calculations, and documentation of amounts reported for the audit period
- Audited financial statements for the most current fiscal/calendar year
- Monthly income statements for periods covered under the audit
- Month end general ledger reports or subsidiary ledgers listing gross revenues
- Monthly sales journals listing detailed transactions
- Revenue worksheet summarizing revenues by reporting period (the auditor will send this form to you to be completed prior to the commencement of the audit)
- Daily register summaries, sales invoices, z-tapes, and/or other supporting data for selected sample dates
- Chart of accounts
- Three most recent Federal income tax returns
- Copies of bank statement for periods covered under the audit
- Internal control questionnaire (the auditor will send this form to you to be completed prior to the commencement of the audit)
However, if you are unable to resolve the matter with your auditor, you have the right to appeal the audit results, as described in the following question.
This extra assurance may serve to expedite the audit by minimizing testing requirements and/or time spent corresponding back and forth.
The auditor will walk through your operations with you and take a look at your records.
The auditor will alert you to any practices that could be a problem later on and provide advice on how to correct the matter.
The auditor will share suggestions designed to make your recordkeeping more complete and accurate so that you’re ready in the event of a future audit.
The auditor will discuss all the tax issues with you to help ensure that you have a full understanding of the law and the reporting requirements.
This helps make sure that your business gets off on the right foot. This time is an opportunity for businesses to ask any questions they may have regarding their regulatory requirements.
By taking full advantage of the auditor’s knowledge, asking questions and sharing any concerns, it is our hope that you will get off to a much more successful start in your new endeavor.
Clark County Code 4.08.085 specifies the records that must be kept by Transient Lodging Establishments.
The Diplomatic Tax Exemption Program shows examples of tax exemption cards issued by various agencies. Also, see the GSA website and related sites for:
“Permanent resident” means any individual who has or shall have the right of occupancy in a sleeping room/space at the same transient lodging establishment for thirty-one consecutive days or more, and for whom rent is exempt from the transient lodging tax on the thirty-first day and every consecutive day thereafter, provided the individual continues to occupy or continues the right to occupy a sleeping room/space at the same transient lodging establishment. Clark County Code Section 4.08.005(14).
Per Clark County Code Section 4.08.050 (b), no transient lodging tax is imposed on rent received from permanent residents.