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ACTION NEEDED by April 30, 2019 for Incorrect Tax Rate in Pierce Co, Washington, April 2019

Overview

Avalara recently determined that between April 1 and April 5, 2019, transactions applied to addresses in unincorporated Pierce County, Washington may have produced unexpected sales tax results. Transactions in unincorporated Pierce County may show an unexpected sales tax rate of 0% instead of 7.9%.

Environment

AvaTax

Resolution

Please take these mitigation steps:

Identify affected transactions

Review your sales transactions in unincorporated Pierce County, Washington from April 1 through April 5, 2019 to see which transactions calculated with an unexpected sales tax rate of 0%.

To find affected transactions, review transactional data on the Transactions tab in AvaTax, or run a Tax Return - Sales and Sellers Use Tax Report.

You may also contact Avalara Customer Support and request that a list of transactions be securely transmitted to you.

Recalculate sales tax on the affected transactions

Because the Washington state tax return filing period is open, you will need to complete this review and make any necessary changes on or before April 30,2019. 

  • To recalculate sales tax, import transactions, or recalculate from your accounting system.
  • Next, re-bill your customer for the corrected 7.90% tax rate. You may also elect to absorb the undercharged tax and not re-bill your customers.

Note: You may choose not to recalculate tax due and report the tax charged and collected as-is. If you do make this choice, 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.