Case Study: Sales & Use Tax

Addressing an Operator’s Overpayments Holistically

Addressing an Operator’s Overpayments Holistically

CHALLENGE

A Colorado oil and gas operator’s longtime sales tax compliance staff left the organization, taking a great deal of institutional knowledge with them. With no matrix left behind to calculate liabilities, the company found itself paying sales tax on about 90% of purchases—and turned to Merit Advisors for assistance.

MERIT SOLUTION

Merit reviewed more than 20,000 invoices from a two-year period and discovered the client was unnecessarily paying sales tax on most of its transactions. Taking a holistic approach, our team:

  • Phased out unnecessary sales tax payments
  • Quantified past overpayments
  • Worked with the client to ensure long-term compliance

RESULT

A $4 million refund claim was filed with the state of Colorado to recover the client’s overpayments. Merit helped develop a matrix accounting for various state-specific tax nuances, and trained multiple departments to avoid future overpayments—as well as the need for third-party tax reviews. Thanks to Merit, the client now pays sales tax on only 20% of all purchases.

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CHALLENGE

A Colorado oil and gas operator’s longtime sales tax compliance staff left the organization, taking a great deal of institutional knowledge with them. With no matrix left behind to calculate liabilities, the company found itself paying sales tax on about 90% of purchases—and turned to Merit Advisors for assistance.

MERIT SOLUTION

Merit reviewed more than 20,000 invoices from a two-year period and discovered the client was unnecessarily paying sales tax on most of its transactions. Taking a holistic approach, our team:

  • Phased out unnecessary sales tax payments
  • Quantified past overpayments
  • Worked with the client to ensure long-term compliance

RESULT

A $4 million refund claim was filed with the state of Colorado to recover the client’s overpayments. Merit helped develop a matrix accounting for various state-specific tax nuances, and trained multiple departments to avoid future overpayments—as well as the need for third-party tax reviews. Thanks to Merit, the client now pays sales tax on only 20% of all purchases.

The Rewards of Merit
$4
million
Refund claim filed