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Vendor Discounts and Credits

This article applies to:Avalara AvaTax Update

Differences between your general ledger and scheduled returns are almost always attributable to one or both of the following:

  • Vendor discounts (a.k.a. timely filing discounts)
  • Applied and excluded credits

The amount in the Tax Due Avalara line on the Return Summary page directly corresponds to the amount in Amount Due column for that return in the list of scheduled returns on your Schedule and Approve Returns page. It's the amount Avalara pulls from your account for that specific return. The amount in the Remittance to Tax Authority line is the amount paid to the state at the time of filing. Occasionally, the amounts listed under Amount Due, Tax Due Avalara, and Remittance to Tax Authority may not match your general ledger. In some cases, the amounts under Tax Due Avalara and Remittance to Tax Authority may not match each other.

Vendor discounts

One of the most common causes of differences between your returns and your general ledger is vendor (a.k.a. timely filing) discounts. Vendor discounts appear on the return under Remittance to Tax Authority. Vendor discounts can affect the amounts in Remittance to Tax Authority and Tax Due Avalara, causing neither number to match your general ledger.

Returns recognizes vendor discounts in real-time on the return in the period in which they are earned. For example, if you earn a vendor discount in June, you see it on the June return.

Applied and excluded credits

Any credit that would result in a negative return is excluded from the return; only the positive liability (or a zero dollar return) is filed. These applied and excluded credits, often called carryover credits, are carried forward to the next filing period. Returns checks to see if there's enough liability available to offset the amount of the credit. If there is, AvaTax Update applies the credit against the return. If the credit can't be applied in full, once again it's excluded and carried forward. (Avalara doesn't apply partial credit; liability must be equal to or greater than the credit applied.) The credit continues to be carried forward until there's a period with enough liability to absorb the credit completely.

If you have an excluded credit that won't be applied for the foreseeable future, you can resolve the issue by amending the original return with the credit in place. Send an email to avataxreturns@avalara.com with the document code (invoice number) of the credit and a request to amend the return and period in question. Be sure to mention that the credit is in carryover and you want to amend the original return. See our documentation on filing late or amended returns for specific guidelines on how to submit a request.

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