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Conducting An Audit
The business owner is responsible for reporting and remitting the appropriate City Transaction Privilege (Sales) and Use taxes. Your business may be selected for an audit of such taxes by the City. The audit generally covers the most recent 4 year period, but may include the most recent 6 year period if the taxable amount is understated by 25% or more. Also, an audit may extend to previously non-audited periods where no return was filed or fraudulent returns were submitted.
The audit can be conducted at your business location, at the City offices or at a mutually agreeable location, such as an accountant or bookkeeper office, during normal business hours. If you desire the City to work directly with your external accountant, bookkeeper, lawyer, or other external representative, then you will need to complete a power of attorney form (pdf/8kb/1pg). The business owner would be responsible for payment of any additional taxes, interest, and applicable penalties that are identified during the audit.
In the event your business is selected for an audit, state law requires the City to offer you a multijurisdictional audit for all business activity in Arizona. If you elect to have us perform a joint audit for all of the jurisdictions in which you operate, the scope of the audit would be expanded to cover the most recent 4 year period for all jurisdictions.
By making this election, all cities and towns would be prohibited from conducting another audit of your business for any portion of the time period covered by this audit unless an exception existed pursuant to ARS-42-2059. If you do not elect to have this audit completed as a joint audit, your business will remain subject to an audit by all other jurisdictions in which you have taxable activity. The State of Arizona may or may not accept the audit as a joint audit and would not be prohibited from conducting an audit of your business due to its refusal to participate.
Pursuant to state law, the City of Scottsale is required to offer a joint audit. The taxpayer has the option for a joint audit with additional jurisdictions or an audit limited to the City of Scottsdale. The Arizona Department of Revenue does not have to accept the joint audit and would not be prohibited from conducting an audit.