You would like to know what an annual reconciliations return is and why it is used.
- An annual reconciliations return is a return that compiles all transaction data, including taxes collected and taxes paid, for January 1st to December 31st of a given year.
- This is used to remit any backdated transactions created after the return for a specific return was filed.
- Example: Your March return was already filed, but a transaction was created and dated for the March period.
- When viewing this in AvaTax:
- The Period Liability Sales column displays the tax amount for the entire year.
- The Prior Payments listed in the Remit To Avalara Details displays all payments made for the entire year.
- The Return Remittance amount listed is the tax liability that has not been reported or paid for the entire year.
- An annual reconciliations return is required by:
- Hawaii (HI)
- Michigan (MI)
- Rhode Island (RI)
- If you participate in the Streamline Sales Tax (SST) program in HI or MI, you are not required to file annual reconciliations as long as you filed as SST for the entire year. However, if you started filing as SST midway through the calendar year, annual reconciliations are still due in HI or MI.
- If you are unsure if you a required to file the annual reconciliations return, please contact the each state's Department of Revenue:
For steps to add your annual reconciliations filing calendar to AvaTax so that Avalara will file it, review Use the Avalara Returns Filing Calendar.