Avalara recently determined that between June 1 and June 11, 2019, transactions in Connecticut for products eligible for exemption with a properly executed exemption certificate may have produced unexpected sales tax results instead of returning as exempt. Products sold with a properly executed exemption certificate may show an unexpected Connecticut state sales tax rate of 6.35%.
Please take these mitigation steps:
Identify affected transactions
Review your transactions sold to an exempt entity or for an exempt use in Connecticut from June 1 through June 11, 2019, to see which transactions calculated with an unexpected sales tax rate of 6.35%.
To find affected transactions, review transactional data on the Transactions tab in AvaTax, or run a Tax Return - Sales and Sellers Use Tax Report.
Recalculate sales tax on the affected transactions
Because the Connecticut state tax filing period is open, you will need to complete this review and make any necessary changes on or before June 30, 2019.
- To recalculate sales tax, import transactions, or recalculate from your accounting system.
- Next, refund your customer the 6.35% sales tax rate.
Note: It is unlawful to over collect and not remit the over-collected tax, so if you choose not to recalculate and refund the over-collected tax, you must report and remit the over-collected tax.
Contact your tax professional for guidance specific to your business on how to report the overcharged tax.