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Avalara Help Center

Can Avalara make my larger second prepayment for Q2 in California?

Overview

Per CA state guidelines, your second prepayment for Q2 must be an advanced payment for the period of May 1st to June 15th and must be equal to: 

  • 90% of the tax liability for May plus 90% of the tax liability for the first 15 days of June, or
  • 135% of the tax liability for May, or
  • One-half (1/2) of the measure of tax liability reported for the corresponding quarterly period of the preceding year multiplied by the tax rate in effect when prepayment is made, provided you or your predecessor were in business during all of the quarter.

Environment

Avalara Returns

California

Resolution

  • Avalara does not default to using the higher calculation methods for May as our system is currently unable to support them. Avalara defaults to the standard 100% of current month liability for May's prepayment. But we can certainly make the larger prepayment on your behalf.
    • Avalara can support the 135% calculation method upon request.
    • If you prefer to use one of the other calculation methods, see below:
      • For One-half (1/2) of the measure of tax liability reported for the corresponding quarterly period of the preceding year multiplied by the tax rate in effect when prepayment is made, provided you or your predecessor were in business during all of the quarter, you can adjust the May prepayment total by adding a prepayment adjustment.
      • For 90% of the tax liability for May plus 90% of the tax liability for the first 15 days of June, we suggest that you make the payment directly to the state as the deadline for liability changes would be June 10th, prior to a business getting the full data for this calculation.
        • Make sure to add the prior payment to your CA State return when reconcilation is completed for the Q2 filing.
  • Because our system cannot support the one off higher payment calculation, Avalara has to be notified to do so
    • The amount can be adjusted in AvaTax with your specified amount, or
    • You can open a case with Support to have the amount calculated by our compliance team.
  • All liability changes are required to be made before the locking date of the 10th.
    • An extension service can be setup for the 12th, at the latest, to make this change.