Grocery Stores
Revised 09/2004
Table of Contents
- I. Introduction
- Introduction
- II. What Is Taxable at Grocery and Convenience Stores?
- Examples of Taxable Items; Food Sold for Immediate Consumption; Photo Processing; Rentals of Tangible Personal Property; Cigarettes and Tobacco Products; Newspapers; Phone Cards; Over-the-Counter Drugs and Medicines
- III. Methods of Tax Determination
- Cash Register Keys; Computer-Generated Sales Registers; Retail Inventory Method; Gross Profit Method (Shelf Test); Estimated Taxable Percentage
- IV. Special Reporting Methods
- Method B - Purchase Ratio Method; Method C - 15% of Gross Sales; Audit Procedure - 15% Method; Method E - Commingled Receipts
- V. Miscellaneous Grocery Store Topics
- 5% Audit Allowance; Actual Substantiated Losses; Penalty and Interest Application; Allowance for Bad Debts; Consignment and Commission Sales; Coupons and Premiums; Trading Stamps; Vending Machine Sales; Soft Drink Returnable Bottle Deposits; Items Purchased by Customers with Food Stamps / Lone Star Card; Combination Grocery and Snack Bar or Delicatessen; Items Withdrawn from Inventory for Use; Wrapping and Packaging Supplies
- VI. Auditing Procedures
- Purchase Ratio Method, Exhibit - Transaction Entry; Markup Methods; Lack of Taxpayer Records, Exhibit - Letter to Vendor, Exhibit - Vendor's Records; Beer, Wine & Tobacco Vendor Data; Alternative Markup Factors
- VII. Grocery Store Audit Checklist
- Gross Sales; Taxable Sales; Selection of Test Periods; Examination of Records; Sampling/Estimation Issues
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