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What you need to know and do about Avatax incorrect results of sales and use tax rates in Tallassee, Alabama between September 1 and October 10, 2018

Overview

Between September 1 and October 10, 2018, AvaTax transactions that included sales and use tax rates in Tallassee, Alabama within Elmore County produced inaccurate results.  The Tallassee tax with Elmore County tax calculated using a 4% tax rate rather than the appropriate rate of 5%, resulting in an under-collection of tax.

Environment

AvaTax

Resolution

Avalara has updated the AvaTax rates effective October 11, 2018.

Please note that any transactions dated September 1 through October 10, 2018 will have taxed using a 4% rate in Tallassee, Alabama within Elmore County.

Please take these mitigation steps:

Identify affected transactions

Review your sales transactions in Tallassee, Alabama within Elmore County from September 1 through October 10 and identify which transactions have Tallassee within Elmore County taxes calculated incorrectly. To find affected transactions, review transactional data on the Transactions page in AvaTax, or run a Tax Return - Sales and Sellers Use Tax Report.

You may also contact Avalara Customer Support and request a list of transactions be securely transmitted to you.

Once you have identified affected transactions

Because the Alabama state tax return filing period is closed for September, you will need to file an amended return for September transactions. The Alabama state tax return filing period is open for October, so you will need complete this review and make any necessary changes on or before October 30, 2018.

To recalculate sales tax: import transactions, or recalculate from your accounting system.

  • Determine how to approach re-billing your customers: You may elect to absorb the undercharged tax, or you can re-bill your customers for the corrected Alabama tax.

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.

If you need assistance, please contact Avalara Customer Support.