Article
Brochure
Executive Resource
Insight Hub
Ext. Publication
VideoPreparing for Sales and Use Tax Audits in Manufacturing | Podcast
Never miss a thing.
Sign up to receive our Tax News Brief newsletter.
On the Shop Floor
Sales and use tax issues often surface only after an audit notice arrives, when small mistakes turn into measurable costs. In this episode of Weaver: Beyond the Numbers, On the Shop Floor, Kurtis Dixon and Marvin Ferguson are joined by Blake Fuqua to discuss how sales and use tax applies across the manufacturing industry. The conversation focuses on common exemption errors, what auditors are reviewing today and practical steps manufacturers can take to manage risk and avoid unnecessary exposure.
Key Points:
- Sales and use tax applies beyond product sales, including machinery, utilities, repairs and automation projects.
- Incomplete or missing exemption certificates are a leading cause of audit exposure.
- Proactive reviews can uncover overpayments and reduce audit risk before issues escalate.
Manufacturers often associate sales tax primarily with customer transactions, but the greater risk frequently sits on the purchase side. Equipment, utilities, repair services and automation investments may qualify for exemptions, yet they are commonly taxed due to documentation gaps or vendor defaults. Blake notes that “sales tax is buried in your purchase side,” and failing to assess those transactions can lead to compounded exposure when errors are projected across audit samples.
Audit activity has increased as states look to sales and use tax to close revenue gaps, making compliance more urgent for manufacturers of all sizes. According to Blake, audits are often random and can reach back several years, particularly when companies are improperly registered or have not filed returns. “It’s not if, it’s when you’re going to be audited,” he explains, underscoring the importance of registration, filing discipline and ongoing reviews to limit look‑back periods and liability.
The episode also highlights opportunities that are frequently missed, including refund claims and direct pay permits. Overpaid sales tax can often be recovered within the same statute of limitations applied to audits, sometimes with interest. As Blake explains, identifying overpayments and issuing exemption certificates can “stop the bleeding” on a go‑forward basis, allowing manufacturers to strengthen compliance while improving cash flow and audit readiness.
Subscribe and listen to future episodes of Weaver: Beyond the Numbers, On the Shop Floor, on Apple Podcasts or Spotify.
©2026
Podcast