ACTION NEEDED by February 20, 2021 for Unexpected Under collection of Local Sales And Use Tax in Chambers County Alabama
Overview
Avalara recently determined that between January 1, 2021 and February 7, 2021, transactions applied to addresses within Chambers County Alabama may have returned only the 4% Alabama State Sales and Use tax rate and no local rates.
Please follow the steps below to mitigate this situation.
Environment
AvaTax
Resolution
Please take these mitigation steps:
Identify affected transactions
Review your sales and use transactions for the Chambers County Alabama regions below from January 1, 2021 through February 7, 2021, to see which transactions calculated with an unexpected sales or use tax rate of Alabama state only 4%.
| Impacted Regions Within Chambers County, AL | |
|---|---|
| Chambers County UN | |
| Cusseta | Cusseta UN |
| Five Points | Five Points UN |
| Fredonia | |
| Lafayette | Lafayette PJ |
| Lanett | Lanett PJ |
| Valley | Valley PJ |
| Wadley PJ | |
| Waverly | Waverly PJ |
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 will need to complete this review and make any necessary changes on or before February 20, 2021.
Recalculate sales tax on the affected transactions
You will need to complete this review and make any necessary changes on or before February 20, 2021.
- To recalculate sales tax, import transactions, or recalculate from your accounting system.
- Next, re-bill your customers for the updated local rates. You may also elect to absorb the undercharged tax and not re-bill your customers.
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.