How can I accurately allocate refunds for sales tax and sale items?

eAccountant
Visitor
1 0 0

Can the total refund be allocated to the sale item and tax when issuing a refund? Specifically for partial refunds? Otherwise, Shopify sale tax reports are inaccurate.  Do third-party apps like Tax Jar or Avalara correct for this issue?

Replies 2 (2)

CloudlabSam
Shopify Partner
553 46 91

Refunds can be allocated to individual items it you are refunding those items. In these cases the tax is also refunded and allocated properly.

Refunds can also be applied to shipping and again the sales tax should be refunded and allocated properly.

If you perform a general order refund then the taxes are not refunded, as it would not know which items they apply to or if they should apply at all.

tongbo
Shopify Partner
12 0 0

Hi @eAccountant,

I can't speak for other apps, but Sidr Tax tries to be as accurate as possible. If you chose the line items while issuing a refund, then a tax refund is also allocated to those items. If you issued a manual refund without line items, it's usually exempted because it's hard to know which item this refund goes to.