Tax Under-Collection in Returns and Common mistakes

If a return shows a positive tax difference, it indicates that you have under-collected taxes on certain transactions based on the data available in Galvix. This difference must be paid out of pocket to the respective state.

To identify the affected transactions:

• Click the "View Details" button next to the displayed tax difference.
• Or, navigate to the "With Tax Difference" tab in the Transactions card on the Return Details page.

Possible reasons and fixes for Tax Under-Collection are:

Tax collection is not enabled for the jurisdiction in your billing system.

If tax collection is not enabled for a jurisdiction in your billing system, Galvix may detect a tax difference.

Steps to resolve:

• Open the Transaction Details page and check the Tax Location of the affected line item.
• Go to Registrations in Galvix and search for that tax location to confirm if a registration exists for it.
• If a registration exists, check your billing system’s settings to see if tax collection is turned on for that location.
• If tax collection is off, enable it and recheck the tax difference.

If the issue persists, continue to the next step.

Missing or Incorrect Exemption Data in Galvix

Galvix may not have all the necessary exemption details for the jurisdiction, leading to incorrect tax calculations.

Steps to resolve:

• Verify if the customer is marked as tax-exempt in your billing system.
• If the customer is exempt, check if the same exemption is added in Galvix by navigating to Settings → Exemption Rules → Customers
• If the exemption is missing in Galvix, add it and then check the tax difference again.
  • You can check these links to learn more about adding customer-based exemptions and adding channel-based exemptions in Galvix.

If the issue persists, proceed to the next step.

Mismatched Tax Categories Between Galvix and Your Billing System

If the tax category assigned to a product in Galvix does not match the one in your billing system, it can lead to incorrect tax calculations.

Steps to Resolve:

• Go to the Transaction Details page and check the Tax Category and Tax Rate for the affected line item.
• Compare it with the tax category and rate in your billing system.
• If there’s a mismatch, update the tax category in either Galvix or your billing system to ensure consistency.
  • You can check this link to learn more about updating the product tax category in Galvix.
• If the correct tax category is not available in Galvix, contact support@galvix.com for assistance.

Following these steps will help resolve tax under-collection issues and ensure accurate tax calculations in Galvix.