Our Audit is almost complete.  The auditor spent a couple of days here going through things, and gave us a draft of what she had found.  We are going to go over the draft to investigate and double check that the auditor is correct in her findings.  We will meet her again on Friday, to go over all her findings and to show her how some of the findings are not taxable.  She found several transactions that she says should have had sales taxes, and a few that we were supposed to report and pay consumer's use tax.   We found out that when we donate an item to a chartiable event or group,  we have to pay sales tax on it since it was pulled from inventory!  I personally find this horrible,  we decide to donate and give up the money we have invested in a product to sell,  and now i have to report it and pay more just because i dont have it any longer.   I think this policy will make it harder for us to donate objects to charity again!  We donated our inventory to chaity,  the state should default the tax on those items for chaities sake as well!