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Credit and rebill in AvaTax

This article applies to:AvaTax

In certain cases, your business may need to credit sales tax back to a customer. When this happens, the most accurate method is a credit and rebill, which consists of adding two new transactions: a negative transaction that cancels out the original, and a new transaction with corrected details.

You might need to credit and rebill if a customer provides an exemption certificate after being charged sales tax on a transaction. With this method, AvaTax reflects that the customer was correctly refunded for the sales tax they paid. 

Steps

  1. Log in to AvaTax and go to Transactions > Transactions.
  2. Create a negative transaction:
    1. Select Add Transaction.
    2. Enter document details for the transaction. Aside from the Document Code, these should match those of the original transaction. 
      Tip icon It can be helpful to use document codes that indicate the new transaction's purpose. For example, if the original transaction's code was INV123, the new transactions could use INV123_Rebill and INV123_Credt.
    3. Select Add a line item. Then enter a Total Amount that's the same as that of the original transaction, but negative—this transaction and the original should sum to 0.
    4. Select Save. 
  3. Create a new transaction:
    1. Go back to the main Transactions page, and select Add Transaction again.
    2. Enter the corrected document details.
      For more information on exempting a customer from sales tax, see Options for exempting customers.
    3. Select Add a Line Item and enter the new Total Amount.
    4. Select Save.
  4. If you have an integration with AvaTax, reconcile the transactions you added with what's in your business application.
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