1. Tourist Development Tax Audit Fieldwork & Assessment
August 5, 2015
Scarlet Gibson
Damiana Pache
Melinda Medina

2. Objectives Exemption Test Gross Receipts Test
Tourist Development Tax Audit Assessment

3. Exemption Test
Determine if Adequate Support was Maintained as Required by State Statutes
Schedule Allowed/Disallowed Exemptions
Request Explanation and Additional Supporting Documentation for Disallowed Exemptions
Finalize Schedule and Compute Over/Under Reported Exemption Amount for Sample Months
See Exhibits I

4. Exemption Test Cont…
If Necessary, Compute Error Ratio Based on the Results of Sample Months
Extrapolate Error Ratio to Audit Period and Compute Total Over/Under Reported Exemptions for Audit Period
See Exhibit II

5. Gross Receipts Test - Hotel
Become Familiar with Night Audit Packages
Locate the Following Reports Generated by Reservation System:
- Daily Summary
- Daily Details

6. Gross Receipts Test – Hotel Cont…
Identify Revenue Categories that are Subject to the TDT (Room charges, resort fees, pet fees, etc.)
Schedule Daily Room Revenues on Excel
(Note: Keep track of all revenues posted to a miscellaneous account to review further. Also, keep track of taxes collected to ensure all taxes collected were remitted.)

7. Gross Receipts Test – Hotel Cont…
Compare Amounts on Daily Summary to Daily Detail Reports
Request Sample of Folios
Trace Amounts on Folios to Daily Detail Reports

8. Gross Receipts Test – Hotel Cont…
Compare Revenues as Posted to Reservation System to Revenues Posted to Accounting System for Each Sample Month to Include Review of:
- General Ledger (GL)
- Income Statements/Profit & Loss Statements
Request Explanation and Supporting Documentation for Discrepancies Identified

9. Gross Receipts Test - Hotel Cont…
Review State Sales and Use Tax Returns (DR-15s) and Compare to TDT Returns
Request Explanation and Supporting Documentation for any Discrepancy

10. Gross Receipts Test – Hotel Cont…
Finalize Schedule and Compute Over/Under Reported Gross Rental Receipts for Sample Months

11. Gross Receipts Test – Hotel Cont…
If Necessary, Compute Error Ratio Based on Results of Sample Months
Extrapolate the Error Ratio to Audit Period and Compute Over/Under Reported Gross Rental Receipts for Audit Period

12. Computation of Tourist Development Tax Audit Assessment
Prepare Schedule Illustrating Total Under Reported Taxable Revenue Based on Results of Exemption and Gross Receipts Tests
Compute Tax Audit Assessment, to Include:
Tax
Penalty
Interest

13. Questions?

14. Thank you!