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ACTION NEEDED: Review transactions in Avalara AvaTax by August 31, 2021

Overview

Avalara recently determined that between August 8 - 10, 2021, transactions covered by the Sales Tax Holiday in Maryland may have produced an unexpected under-collection of sales tax. 

Effective August 11, 2021, we have updated Avalara AvaTax to return the expected local sales and use tax rates for clothing and shoes tax codes. To minimize potential risk for transactions between August 8 and August 10, follow the steps below to review your transactions.

Jurisdiction Impacted

State of Maryland

Environment

AvaTax

Resolution

Recalculate sales tax on the affected transactions

If you have affected transactions between August 8 and August 10, 2021, you may elect to rerun the transactions.

  1. In AvaTax, select the Transactions tab.
  2. To locate the transactions impacted:
    • Select a date range From 08/08/2021 To 08/10/2021.
    • Select Document status: Committed.
    • Select Country: United States of America.
    • Select Region: Maryland.
  3. Select the the transactions to recalculate, or select all filtered transactions by selecting the top check box. NOTE: Keep in mind that locked transactions can't be recalculated; any transactions included in filed returns must be credited and rebilled.
  4. Select Recalculate, then select Yes, Recalculate.
  5. When recalculation completes, select OK.

Note: If you choose not to recalculate tax due and report the tax charged and collected as is, you risk an unfavorable audit and additional tax assessment, plus potential penalties and interest in the future.

If needed, contact your tax professional for guidance on how to report the undercharged tax.