How Many Auditors Does Each State Have?

Nobody enjoys being audited. But states will always initiate audits because they are a critical component of state revenue acquisition. Some states, you might find, are much more aggressive than others regarding audits. Understanding the resources each state has access to can help us understand each states level of aggressiveness. This comprehensive guide explores the distribution of auditors across states and provides valuable insights for businesses preparing for potential audits.

Overview: State Tax Audit Forces

Sales tax audits are an inevitable aspect of doing business in the United States. Every state maintains a dedicated force of tax auditors whose primary responsibility is ensuring businesses comply with state tax laws and regulations. The size and structure of these audit forces vary significantly by state, typically correlating with the state's population and economic activity.

State Auditor Count By State

Understanding the distribution of auditors across states might help businesses gauge their likelihood of being audited and prepare accordingly. There are some states businesses are much more likely to get audited in, and the number of auditors that state employs in a factor to that likelihood.

Top 10 Largest Audit Forces

The largest states typically maintain the most substantial audit forces: (info based off of 2024 statistics)

1. California

With over 1,200 state tax auditors across multiple districts, California leads the pack. The main cause of this is reflected both by the state's size and complex tax structure.

2. Texas

A definite aggressive audit state, Texas maintains approximately 800 auditors in regional enforcement offices, focusing on both in-state and out-of-state businesses.

3. New York

New York comes in at number three, employing 600+ auditors with specialized industry teams to address specific sector challenges.

4. Florida

Florida utilizes 500 auditors distributed across 5 regional offices to ensure statewide coverage.

5. Illinois

Illinois concentrates 400 auditors primarily in the Chicago metro area, with satellite offices throughout the state.

6. Pennsylvania

Pennsylvania has 350 auditors with state-wide coverage and specific industry focuses.

7. Michigan

Michigan maintains 300 auditors with particular attention to manufacturing and retail sectors.

8. Ohio

Ohio distributes 275 auditors across major cities to ensure comprehensive coverage.

9. New Jersey

New Jersey employs 250 auditors with specialized industry focus teams.

10. Massachusetts

Massachusetts utilizes 225 auditors with regional assignments and industry specializations.

Just because a state isn’t listed on this top 10 list doesn’t mean you won’t get audited. It just means that there are less people employed by the state actively looking for successful audit opportunities. Never assume an auditor won’t find your business. They have one job, to find businesses with outstanding liability in their state, and weed that non-compliance out, at any level.

Every Business Will Eventually Face an Audit

The reality is that most businesses will face a sales tax audit at some point. Several factors contribute to audit selection:

• Regular audit cycles based on business size and revenue
• Industry-specific audit initiatives targeting high-risk sectors
• Changes in business operations or unusual reporting patterns
• Random selection processes designed to maintain broad compliance

Preparing for the Inevitable

While it may be tempting to wait until an audit notice arrives to begin preparation, this reactive approach can lead to significant stress and potential compliance issues. Proactive preparation allows businesses to identify and address any tax reporting discrepancies before they become audit findings. Additionally, maintaining organized records and established compliance processes as part of regular operations is far more efficient than trying to reconstruct documentation and implement new procedures under the pressure of an impending audit. Early preparation also provides the opportunity to consult with tax professionals and make necessary adjustments to compliance strategies without time constraints.

Businesses can take several proactive steps to prepare for future audits:

• Maintain detailed records of all transactions, including exemption certificates
• Implement robust sales tax compliance software to automate calculations and filing
• Conduct regular internal audits and reviews to identify potential issues
• Provide comprehensive staff training on sales tax compliance procedures

Risk Factors That Attract Auditor Attention

Certain business characteristics and practices are more likely to trigger an audit:

• Operating in multiple jurisdictions increases complexity and audit risk
• High volume of exempt sales requires additional documentation and scrutiny
• Significant changes in reported sales tax may indicate compliance issues
• Industry-specific compliance issues can trigger targeted audits

Conclusion

While the number of auditors varies significantly by state, all businesses should maintain strong compliance practices regardless of location. The best defense against audit-related challenges is thorough preparation and proactive compliance management. Talk to The Sales Tax People today to better understand your sales tax liability and be prepared to handle and find a successful outcome in an audit situation.