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ACTION NEEDED by June 30, 2019 for Over Collection of Tax on Clothing Transactions in New York State, June 2019

Overview

Avalara recently determined that between June 1 and June 2, 2019, clothing transactions for clothing costing $110 or less in New York state may have produced unexpected sales tax results. Clothing transactions of $110 or less in New York may show an unexpected New York state sales tax rate of 4% instead of 0%.

Environment

AvaTax

Resolution

Please take these mitigation steps:

Identify affected transactions

Review your sales transactions in New York from June 1 through June 2, 2019, to see which transactions calculated with an unexpected sales tax rate of 4%. View the affected product codes in this spreadsheet.

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 New York state tax filing period is open, you will need to complete this review and make any necessary changes on or before June 30, 2019.

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.