Troubleshooting Tax Differences

When reviewing a return, you may see a Tax Difference. This shows whether Galvix has detected under-collected or over-collected sales tax on your transactions.

• Positive Tax Difference -> Over-collected tax (you collected more tax than required).
• Negative Tax Difference -> Under-collected tax (you collected less tax than required).

This guide explains how to identify affected transactions and resolve common issues.

In this guide, we cover:

• Identifying Transactions with Tax Differences
• Fixing Tax Under-Collection (Negative Difference)
• Fixing Tax Over-Collection (Positive Difference)

Identifying Transactions with Tax Differences

The first step is to identify transactions with tax differences. You could do that in one of two ways,

1. Once you are on the Returns page, on the specific return. Click See Details next to the displayed tax difference, which will open up transactions where there are tax differences.

2. Or, go to the Transactions card on the Return Details page and click on the With Tax Difference tab. This will show all the transactions with tax differences that were responsible for that total tax difference in this specific return.

Fixing Tax Under-Collection (Negative Difference)

There could be a few probable reasons for the negative differences.

1. Tax Collection Not Enabled in Your Billing System

If tax collection isn’t enabled for a jurisdiction, Galvix may detect a tax shortfall.

Steps to Resolve:

• In Galvix, go to Registrations and confirm whether a registration exists for that location.
• If registration exists, check your billing system to see if tax collection is turned on.
• If disabled, enable tax collection and recheck the tax difference.

2. Missing or Incorrect Exemption Data

If Galvix doesn’t have complete exemption data, calculations may be off.

Steps to Resolve:

• Verify if the customer is marked tax-exempt in your billing system.

  If missing, add the exemptions in your billing system, and recheck the tax differences. This should be automatically recalculated by Galvix and updated in the calculations.

  Learn more about:

  • Setting Up Exemptions

3. Mismatched Tax Categories

If the product tax category in Galvix doesn’t match your billing system, it can cause miscalculations.

Steps to Resolve:

• Open the Products page → check Tax Category
• Compare with your billing system.
• If mismatched, update the product tax category in Galvix or your billing system.
• Learn how to update tax categories in Galvix.
• If the correct category is unavailable, contact support@galvix.com.

Fixing Tax Over-Collection (Positive Difference)

There could be a few probable reasons for the negative differences..

1. Exempt customers charged tax by mistake

• A customer who should be exempt was not marked as exempt in your billing system.
• Since Galvix only reads exemptions from the billing system, incorrect setup there will lead to over-collection.

Steps to Resolve:

• Check if the customer has an exemption set up in your billing system.
• If missing, add the exemptions in your billing system, and recheck the tax differences. This should be automatically recalculated by Galvix and updated in the calculations.

2. Tax Collection Enabled in the Wrong Jurisdictions

• Your billing system is set to collect tax in a jurisdiction where you’re not registered (and not required to).
• Galvix detects this as over-collection, since the state doesn’t expect you to remit those amounts as of now.

Steps to Resolve:

• Make changes in the jurisdictions marked in your billing system to avoid over-collection.

3. Other Billing System Overrides

   • Shipping, discounts, or fees may be taxed incorrectly in your billing system.
   • Example: Shipping taxed in a state where it should be exempt.

4. Mismatched Tax Categories

Same as under-collection, inconsistencies between Galvix and your billing system can cause overcharging.

Steps to Resolve:

• Open the Products page → check Tax Category
• Compare with your billing system.
• If mismatched, update the product tax category in Galvix or your billing system.
• Learn how to update tax categories in Galvix.
• If the correct category is unavailable, contact support@galvix.com.