Avalara recently determined that between June 1 and June 17, 2019, transactions with a destination zip code of 80538 in the city of Loveland, CO produced unexpected sales tax results of 3.7% instead of 6.7%.
Please take these mitigation steps:
Identify affected transactions
Review your sales transactions in Loveland, CO from June 1 through June 17, 2019, to see which transactions calculated with an unexpected sales tax rate of 3.7%.
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 submit a case to Avalara Support and request that a list of transactions be securely transmitted to you.
To submit a case to our Support team, please fill out this online form: https://help.avalara.com/Directory/Contact_Avalara/Submit_a_Case
Recalculate sales tax on the affected transactions
Because the Loveland, Colorado 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, re-bill your customer for the corrected 6.7% 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.
Contact your tax professional for guidance specific to your business on how to report the undercharged tax.