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ACTION NEEDED by March 31, 2020 for under collection of sales tax in unincorporated Larimer County, CO

Overview

Avalara recently determined that between February 26 and March 3, 2020, sales tax transactions in the unincorporated area of Larimer County, CO may have produced unexpected sales tax results. Sales tax transactions may show an unexpected sales tax rate of 2.9% instead of 3.7%.

Environment

AvaTax

Resolution

Please take these mitigation steps:

Identify affected transactions

Review your sales transactions in unincorporated Larimer County, CO from February 26 through March 3, 2020, to see which transactions calculated with an unexpected sales tax rate of 2.9%.

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 Colorado state tax filing period is open, you will need to complete this review and make any necessary changes on or before March 31, 2020.

  • To recalculate sales tax, import transactions, or recalculate from your accounting system.
  • Next, re-bill your customer for the corrected 3.7% sales 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.