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ACTION NEEDED by February 28, 2019 for Incorrect Tax Rate in Santa Clarita, California, February 2019

Overview

Between February 1 and February 6, 2019, Avalara AvaTax transactions to addresses in Santa Clarita, California produced inaccurate results. The district tax of 2.25% did not calculate, resulting in an under-collection of tax.

Environment

AvaTax

Resolution

Please take these mitigation steps:

Identify affected transactions

Review your sales transactions in Santa Clarita, California from February 1 through February 6, 2019 and identify which transactions calculated with the incorrect tax rate of 7.25%.

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.

Adjust affected transactions

Because the California state tax return filing period is open, you’ll need to complete this review and make any necessary changes on or before February 28, 2019.

To recalculate sales tax, import transactions, or recalculate from your accounting system.

  • Next, re-bill your customer for the corrected 9.50% 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.

If you need assistance, please contact Avalara Customer Support.