The company has a policy that any item or error amounting to $5\%$ or more of the net income before tax is considered material. The following financial information is available:

$$ Net Income before Tax: $$1,500,000$

$$ Error Discovered in Inventory Valuation: $$70,000$

Determine whether the error in inventory valuation should be corrected in the financial statements based on XYZ Corporation's materiality threshold.