Recovering Overpayments & Making Long-Term Fixes

This large exploration and production company maintains operations across multiple states.

Challenge:

The company lacked in-house staff to manage sales and use tax compliance. As a result, there was no process in place to ensure taxes were paid correctly on lease operating expenses and capital expenditures.

Merit Solution:

• Merit Advisors conducted a reverse audit of past expenditures and identified a significant amount of overpaid sales and use taxes in Texas and Louisiana.
• Our sales and use tax team also identified some exposure, and therefore recommended initiating voluntary disclosure.
• Merit also recommended outsourcing the monthly compliance function and obtaining a Texas direct pay permit to ensure the lowest tax rate would be due on large purchases.
• Our team provided training for the purchasing, engineering and accounts payable departments to explain our findings and implement process changes to avoid errors going forward.

$2M+

continued annual tax savings

$1M

saved in local taxes with Direct Pay Permit