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Avalara Help Center

Why do the sales on a return not match my liability worksheet?

Overview

You have found that your sales, taxable sales and/or nontaxable sales that were filed on the return do not match the amounts listed on your liability worksheet.

Environment

Avalara Returns

Resolution

  • Avalara makes sure to report and remit the amount of tax that our customers collect.
  • There are times where the sales amount does not calculate to the taxes collected.
    • This causes the sales, taxable sales and/or nontaxable sales to be adjusted.
  • This is caused by: 
    • Nexus tax type setup incorrectly
      • Not using in-state locations as the origin address on your transactions when nexus is set to sales tax
      • Calculating sales tax while the form is used to remit sellers/retailers/vendors use tax, or vice versa
    • Using tax overrides
      • Tax only transactions
      • Overriding the tax amount on the transaction 
    • Using custom tax rules
      • Rate overrides
      • Base overrides
    • Rounding
      • Calculation between transactions and total taxable sales on a return can differ slightly due to rounding.
        • Calculation on a transaction is defaulted to line level
        • Calculation on a return is generally done by total taxable sales
        • Rounding of a penny can occur every few transactions.
    • Check to make sure if any carry-over credits were applied or excluded.
    • If the period is locked, check the status date of the transactions.
      • Transactions posted to AvaTax after the worksheet has been approved or approved on behalf will not be included on the return.
  • When returns are filed, the priority is to make sure that the tax collected is what is remitted.
    • Since tax overrides adjust the tax amount that should have been collected but do not adjust sales, the sales must be calculated to tie to the taxes collected.
    • Collecting sales tax but not using an in-state location as the origin address will require Avalara to use the out of state section on the return (if applicable).
      • This causes tax to look over calculated, requiring the sales to be altered.
  • To avoid these discrepancies:
    •  It is suggested to do credit and re-bills to create the proper paper trail required for accurate reporting
    • Use in-state locations as the origin address on your transactions if you are meant to calculate and report sales tax
    • Adjust your nexus tax type to sales and sellers use tax if you are meant to calculate and report seller's/vendor's/retailer's use tax

Next Steps

To learn how to view the tax overrides and variances, please view Which report shows the Tax Override and Tax Variance amount?

To learn how to adjust the tax type in nexus selections, please view Edit Nexus Jurisdictions