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%.
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.
- To recalculate sales tax, import transactions, or recalculate from your accounting system.
- Next, refund your customer the 4% 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.