How are refunds displayed in my Reports?
Your TaxJar Reports deduct refunds and returns from the gross sales total in the filing period when the refund took place, regardless of the date of the original transaction.
Note that we will always import refunds into our system and you can see those listed as negative amounts on your Transactions page.
Refunds from a previous period will be reported in the next upcoming return if the refund took place after the filing period of the original transaction. This effectively reduces the gross sales total for the period when the refund took place, which would also reduce the amount of taxes owed during the time frame as well.
- These automatically show up in your account as part of your Actual Sales Tax Collected and Expected Sales Tax Due Reporting for all states.
- In Iowa and New Jersey*, the states want refunds to be reported as exemptions/deductions.
- In those Reports, the refunds that took place during the filing period will be displayed in the Report as exemptions/deductions for that period, even if the original sale was in a prior filing period.
Your TaxJar Report may differ as each state varies on how they accept transaction refunds on their sales tax filings.
- You sold a pasta maker for $100 + sales tax in August, then filed your August sales tax return. A few days later in September, your customer returned the item and you issued a refund of the sale price plus sales tax.
- The sales tax refund will show up as a negative amount in your September TaxJar State Report, but the state won't allow you to file a negative amount on your return.
How does this affect filing a return?
If you are enrolled in AutoFile and a refund causes a negative amount during the current filing period, our system will automatically push those refunds to the next (future) filing period to be deducted from the gross sales when that return is filed.
If you are not enrolled in AutoFile and a refund causes a negative amount during the current filing period, our system will display an alert in the report to let you know that your refunds are causing negative amounts. In this alert, you'll see a button that says "Apply refunds to a future filing." If you click this button, your negative refunds will then be applied to future Reports to be deducted from the gross sales when you file your next return.
Depending on the time the refund took place, and the state's rules for reporting refunds, our Reports may display a refunded sale differently to ensure that the state's guidelines are being met, but we will always import refunds into our system and you can see those listed as negative amounts on your Transactions page.
In some state Reports (more details on those states here), a refund from a previous period can be reported in the next upcoming return. This effectively reduces the gross sales total for the period when the refund took place, which would also reduce the amount of taxes owed during the time frame as well.
In other state Reports (more details on those states here), if a return has already been filed, and a refund takes place after the return is filed, the state may require you to file an amended return to get a refund for a return that took place in a previous period, rather than deducting those returns from the next filing period's return.
For this reason, we handle refunds differently by state, and we discuss this in more detail here in this blog post.