A. A seller shall maintain records of transactions supporting the information that the seller submits on sales tax returns, including without limitation records of daily gross receipts from sales, rentals and services, invoices of purchases and sales, bills of lading and bills of sale. A seller shall also maintain records of transactions that are exempt from sales tax, including information that will substantiate the claim of exemption. The seller shall maintain all such records for a period not less than three full calendar years, except to the extent that the city has authorized in writing their destruction or disposal at an earlier date.

B. If insufficient detail exists within a seller’s business records to substantiate retail sales exemptions, such sales will be reclassified as taxable sales and subject to sales tax collection and remittance.

C. The seller shall immediately notify the city of any fire, theft or other casualty which prevents the seller’s compliance with this chapter. The casualty constitutes a defense to any penalty and/or fee provided in this chapter if determined to be the proximate cause of the failure to comply for a given reporting period, but does not excuse the seller from liability for taxes due. Accidental loss of funds or records is not a defense against the penalties and/or fees of this chapter.

D. Any seller who has established a sales tax account with the city, who is required to collect and remit sales tax, or who is required to submit a sales tax return under the provision of WMC 5.16.100 is subject to a discretionary sales tax audit at any time. The purpose of such an audit is to examine the business records of the seller in order to determine whether appropriate amounts of sales tax revenue has been collected by the seller and remitted to the city.

E. The finance director shall be responsible for selecting the particular sellers whose business records will be audited.

F. Sales tax audits of seller’s business records may be accomplished by either an employee of the finance department or by an individual or firm under contract with the city. The city may use sampling principles or methods in lieu of 100 percent examination of records in conducting a sales tax audit.

G. Sellers selected for a sales tax audit will be notified by letter and will be required to meet with, and make available for inspection and copying, all pertinent business records including income tax returns that may be requested for the prior three years for examination, to the finance department employee, or contractor conducting the audit, within 30 days of notification. Under extenuating circumstances, the finance director may grant an extension of time for compliance.

H. After completion of a sales tax audit, sellers subject to the audit will be notified of the results of the audit by letter. If the audit resulted in an additional sales tax liability to the city, the additional sales tax, with interest assessed retroactive to the date the sales tax was due, must be remitted to the city within 30 days after the receipt of the letter, or the additional sales tax will be subject to the procedures on delinquencies outlined in WMC 5.16.120. If the audit has resulted in a refund due to the seller, the refund outlined in WMC 5.16.145 will be sent to the seller within 30 days. (Ord. 18-06 § 6, 2018; Ord. 16-14 § 15, 2016; Ord. 01-38(SUB) § 2, 2001)