When reconciling your returns in the Schedule and Approve Returns section of the Returns menu, you have found that the amount due is different from the taxes collected.
While you have calculated tax for a state, there are several variables that would cause those taxes to not be due for your return.
Tax Type Mismatch
When setting up a state for tax calculation, and selecting a return to be filed by Avalara on your behalf, it is important to make selections that match your registration. For example, if you are registered to file a Seller's/Vendor's/Retailer's Use tax return but have selected to calculate Sales Tax in your nexus tax type, those calculated taxes will not be filed on your Use tax return.
A simple way to verify what taxes you are calculating would be to run the Sales and Sellers Use Tax Summary report. Compare this with the tax type listed on your registration and your scheduled return with the jurisdiction. You can also check the tax type listed in Where you collect tax.
For home rule states with multiple locals being filed, such as Alabama, the Sales and Sellers Use Tax Jurisdiction Detail can be used to match to the liability worksheet breakout. This will help you see the differences between what is being filed and what was collected.
No Existing Filing Calendar
If you are calculating tax for a jurisdiction but do not have a scheduled return setup for Avalara to file those taxes on your behalf, you will see the amount due as 0.00. If you would like Avalara to file a return on your behalf, you can a scheduled return in All Scheduled Returns under the Returns tab.
If you have a multi-month frequency (Quarterly, Semi-Annual, Annual) and it is not the end of that period, you will see tax calculated but the amount due will be 0.00. You can check the what filing frequency is selected for your return by navigating to Returns > All Scheduled Returns.
A carry-over credit is a transaction with negative liability that is excluded from its intended filing period. This is due to the positive tax liability not being great enough to apply the credit without filing a negative tax return. The credit will continue to roll over to future periods until it can apply without making a negative return. If a carry-over credit is applied, the amount due will decrease. If a carry-over credit is excluded, the amount due will increase.
You can check to make sure if any carry-over credits were applied or excluded by running the Carry-Over Credit or Return Detail report. You can also view them on your returns by navigating to Returns > Manage and Approve Returns > click Manage Returns on the applicable state > click Tax details and adjustments for the applicable return.
If your return is setup with a location code, only the transactions with this code will be be added to your return for filing. You can check your location code settings for your return by navigating to Returns > All Scheduled Returns. Clicking the pencil icon of any return, will take you to edit mode where you are able to see the location code setting. Here you can choose:
- A location that is already created
- Add another location
- All transactions for this collection authority that don't have a location code
- This will add all transactions that do not have a location code to your return. Any transactions with a location code will be omitted from the filing.
- Clear the selection
- This will allow all transactions for the applicable jurisdiction, regardless of location codes, to be filed on your return.
A backdated transaction is a transaction added to a period that has already been filed or approved to be filed. These transactions will not be included on your return. If you are reviewing a prior period where the return has already been filed, any backdated transactions will require an amended return to be filed. If you added transactions to the current period's return but have already approved, you can request the unlock service to include those transactions. To identify a backdated transaction, you can review the Last Modified date found on the Transactions page. This date indicates the last time the transaction was adjusted in AvaTax. If you have a quarterly return with monthly prepayments, transactions added after the prepayment has be reported would not have been included on that prepayment but will be reported on the quarterly return.
Recent Transaction Changes
If you recently made changes to your transactions, it is possible that your returns have not updated with those changes yet. For your returns to reflect those updates, a rebuild would need to be processed. Rebuilds of your data take place every hour automatically or you can rebuild the liability worksheet from the Returns tab.