When performing a Reverse Sales & Use Tax Audit (RSUTA) most firms conduct a targeted review based on what industry a company operates in, but this is not how we perform a RSUTA.  We review all the company’s purchases and after determining the areas where the company has its largest spend we review the tax law to determine if there are any applicable exemptions.    The most common areas we find refunds are in the review of purchases of: Software – Tax laws around IT purchases (i.e. software) do not keep up with the speed at which new products are developed and brought to market.  Furthermore, some purchases by their very nature are challenging to tax correctly in all circumstances. Construction/Interior Design Vendors - Many states provide exemptions on purchases that constitute as “capital improvement.” However, the definition of capital improvement varies from jurisdiction to jurisdiction, and rather than determine how to correctly tax each transaction, many vendors tax all transactions. Promotional Material Vendors – Typically, states use the sourcing laws to determine how transactions should be taxed, allowing for purchases to be taxed based on the location of their final use.  However, most vendors incorrectly tax invoices based on where they ship their goods to, rather than their final destination for use.