This article explains how Zamp files your sales tax returns, how reconciliation works, and how to interpret the three different "tax" numbers that show up in your reports.
How filings work
When we file
Returns are filed based on your state-specific due dates.
Most states have monthly, quarterly, or annual filing frequencies.
We file before the deadline to avoid penalties.
What's included in a filing
All synced transaction data (from your direct integrations)
Manually uploaded CSV data
Adjustments for exempt sales
The three numbers to understand
Before diving into reconciliation, it helps to understand the three distinct numbers Zamp tracks. These can differ from each other, and that's normal.
1. Transaction source data
Transaction source data is the detail that lives in your store, accounting software, or ERP. Examples include Shopify, Stripe, QuickBooks, and NetSuite. Think of source data as the record of sale. It's where you have the most knowledge about which transactions are exempt, why, and how much sales tax was collected (or refunded).
We refer to this as "the source."
2. Tax collected
Tax collected is how much sales tax you told us was collected from the source data. This should match how much sales tax you collected on the transactions that contribute to a filing. It doesn't always match the source exactly. There's typically a small difference (usually less than 1%) between Zamp reports and your own.
3. Tax due
Tax due is how much sales tax is actually owed to a state. It's based on gross receipts, less any valid exemptions. Exemptions can include:
Product exemptions. Based on what your product or service is in the jurisdiction.
Entity exemptions. Based on the purchasing entity's status (e.g., resellers, government agencies, non-profits).
Exempt entities should provide you with an exemption certificate at the time of purchase, or before fulfillment.
Important: Tax due can differ from tax collected, which can differ from your transaction source. This is normal, and reconciliation is the process of understanding why.
Why states determine tax due (not Zamp)
Sales tax due is not determined by us or by the state. It's based on your gross reported receipts, less exemptions. This is why it's so important to categorize and classify your products and customer entities correctly, regardless of whether what you sell is partially or wholly exempt.
If you don't provide Zamp (or the state) with valid exemption reasons, it could mean more sales tax is remitted than was actually collected.
Reconciliation
What is reconciliation?
Reconciliation is the process of making sure the tax we file matches what you actually collected and what you actually owe. We compare your transaction data (the source), tax collected, and state filing requirements.
Common reconciliation questions
"The filed amount differs from what I collected."
This can happen due to rounding differences, tax rate changes mid-period, exempt transactions, or marketplace facilitator remittances.
"Why is there a discrepancy?"
Common causes include missing transaction data, duplicate transactions, or incorrect tax codes on products. If you spot a discrepancy and want us to investigate, send specifics to [email protected].
Overdue filings
If a filing is overdue
We'll notify you if we're missing data needed to file.
Provide the missing information ASAP to minimize penalties.
We can file late returns once we have complete data.
Penalties and interest
States charge penalties for late filings.
Interest accrues on unpaid tax.
Filing early, even with estimates, is often better than filing late.
Amendments
When amendments are needed
Errors discovered after filing
Missing transactions added later
Tax rate corrections
Amendment process
Identify the error.
Contact support with details.
We'll file an amended return if needed.
Need help?
For questions about a filing or reconciliation, reach out at [email protected].