Differences between your general ledger and scheduled returns are often attributable to one or both of the following:
- Vendor discounts (a.k.a. timely filing discounts)
- Applied and excluded credits
The amount in the Tax Due Avalara line on the Return Summary page directly corresponds to the amount in Amount Due column for that return in the list of scheduled returns on your Manage and Approve Returns page. It's the amount Avalara pulls from your account for that specific return. The amount in the Remittance to Tax Authority line is the amount Avalara pays to the state at the time of filing. Occasionally, the amounts listed under Amount Due, Tax Due Avalara, and Remittance to Tax Authority may not match your general ledger, or the amounts under Tax Due Avalara and Remittance to Tax Authority may not match each other. Look in your return details for adjustments that may explain the discrepancy.
One of the most common causes of differences between your returns and your general ledger is vendor (a.k.a. timely filing) discounts. Vendor discounts appear on the return under Remittance to Tax Authority, and may cause the amounts under both Remittance to Tax Authority and Tax Due Avalara to not match your general ledger.
To make sure your returns are always filed on time, Avalara often pulls funds from your account before the amount of any vendor discount is determined by the jurisdiction. Because of this, vendor discounts earned for timely filing are applied to the next return that Avalara files on your behalf, rather than the current return. For example, if you earn a vendor discount in June, it will be applied to your July return.
Applied and excluded credits
Any credit that would result in a negative return is excluded from the return; only the positive liability (or a zero dollar return) is filed. These applied and excluded credits, often called carryover credits, are carried forward to the next filing period. They are applied in chronological order from oldest to newest.
Returns checks to see if there's enough liability available to offset the amount of the credit. If there is, Returns applies the credit against the return. If the credit can't be applied in full, once again it's excluded and carried forward (Returns doesn't apply partial credit; liability must be equal to or greater than the credit applied). The credit continues to be carried forward until there's a period with enough liability to absorb the credit completely.
To see all transactions that were carried over in a given period, run a Tax Liability Worksheet Carryover Credits report.
If you have an excluded credit that won't be applied for the foreseeable future, resolve the issue by amending the original return with the credit in place. Submit a case with the document code (invoice number) of the credit and a request to amend the return and period in question. Be sure to mention that the credit is being carried over and you want to amend the original return. See filing late or amended returns for specific guidelines on how to submit a request.
If you want to remove a credit and not have it carry over to a future return, contact Avalara Support.