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.
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.
- First, create a rate override tax rule effective February 1 through February 6: Learn how to create a rate override tax rule
- 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.