What is Excess Tax?

Excess tax occurs when the amount of tax you collected exceeds the amount that is owed to the state. 

It can occur when your sales tax collection settings are not configured properly, causing you to collect tax at incorrect rates, on sales of exempt products, or on shipping charges.  

• You can easily determine if you are over-collecting by checking if the tax in your TaxJar Actual Tax Collected report exceeds that in your Expected Sales Tax Due report. 
• We discuss more about the differences between these Reports here. If you know you've over-collected, you must either remit this amount to the state or refund your customers. 

If you have any excess tax collected, you must either remit it to the state or refund it to your customers.

How to avoid collecting Excess Tax? 

If you determine you're over-collecting, we recommend reviewing your sales tax collection settings if your sales channel calculates the tax rates. 

If you use TaxJar's API or sell via a supported integration, we strongly recommend reviewing how your products and freight are categorized.