The Aberdeen Group’s Financial Management and Governance, Risk & Compliance research practice has looked into how states are coping with revenue shortfalls. Two things that are popular with states are increasing audits of businesses for sales and use taxes and eliminating tax holidays.
Many governments receive up to 30% of their revenue from sales and use taxes. However, they get far less attention in most businesses than do corporate income taxes. As a result there are often many errors. And even if there are no problems then there are costs associated with the audit.