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What is an annual reconciliation return?

Overview

You would like to know what an annual reconciliations return is  and why it is used.

Environment

Avalara Returns

Resolution

  • 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 that were 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 will display the tax amount for the entire year
    • The Prior Payments listed in the Remit To Avalara Details will display 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
    • Michigan
    • Rhode Island
  • If you are unsure if you a required to file the annual reconciliations return, please contact the each state's Department of Revenue:

Next Steps

For steps to add your annual reconciliations filing calendar to AvaTax so that Avalara will file it, please review Use the Avalara Returns Filing Calendar.

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