Billing > Tax Collection > Maintenance > Tax Refunds

Recent Changes:  
6.204 
- Updated the default setting for creating refunds to allow the selection of a refund transaction code
- Restricted the selection of the refund transaction code to adjustments only  
- Removed the requirement that transactions needed to be posted to ledger before allowing a refund  
- Removed the link to the cash collections payment for the refund transaction  

6.107 
- Corrected logic to not refund excess exemptions. Only payments amounts that exceed the amount due will be refunded through this process.
- Fixed issue where transactions created from refund sometimes had a blank transaction code. This was happening because the system was trying to adjust the exemption transaction when it shouldn't. We should only be adjusting the payment transactions during the refund process.

6.97 and 6.98 - When using on demand corrected the calculation of interest due to the customer when exemptions are changed.  Added ability to turn off the generation of interest if it is not be calculated.

Refer to bottom of page for changes prior to version 6.90

Introduction

Tax Refunds is used to create vouchers for anyone who has overpaid on a bill. The report shows property id, name, tax year, and credit amount owed. There is an option on the screen to allow you to just print the report or to actually create vouchers as well. If the option to create vouchers is chosen if commissions have been paid against the bill that need to be reduced adjusting commission payout entries will be created as well allowing for negative vouchers to be sent over to Accounts Payable in the Commissions Payout process

Explanation

Selection Criteria

Map Numbers - There is a multi select combo where you can specify the properties you would like to report on
Tax Year - There is a multi select combo where you can specify the tax years you would like to report on
Refund range - You can set the minimum and maximum amounts you are refunding
Refund date - Date of the refund. All bills overpaid on or before this date will be included. If on demand interest is turned on, interest will be calculated based on the last payment transaction and up to the date of the refund.

Options

Report Sequence - You can choose to sort by name or map number on the report
Create Refund Vouchers - You can select whether or not vouchers should be created based on the report results
Generate interest if required - This is available when using on demand interest and allows user to either calculate or not calculate interest due back to the customer based on their requirements

Create Refund Voucher Options

Pay Date - Pay date of the voucher
Description - Description used on the voucher
Vendor - Vendor assigned to the voucher. This will be a vendor with a status of "Tax Refund" or "Temporary" and the name and address of each of the people being refunded money will be used.
Account Number - GL Account used for vouchers
Pay Group - You can select whether or not vouchers should be created based on the report results
Posting Month - Posting month of vouchers
Batch Number - batch number for vouchers
Reason Code - sets the reason code for the newly created transactions and will print the reason for the refund on the report header
Transaction Code - only adjustment transaction codes will be displayed

On demand interest

If on demand interest is turned on, interest may be refunded if the assessment was found to be erroneously billed. The interest is calculated based on tax year set up and the date range from when the last payment was accepted to the refund date. If no payments were made before the refund date range, the customer did not make a payment and no interest will be refunded.

For example, if the customer had paid their bill and then the assessment was found to be lower than what was charged, the customer would be left with a credit balance. In this scenario, interest should be refunded based on the time range and based on what the credit balance is.

Conversely, if the customer made an overpayment and the assessment did NOT change, they should be refunded just the overpayment amount with no additional interest because the municipality did not bill in error.

Technical notes about refund transactions and calculation

Interest transactions of a negative amount will be created based on the levies charged. This will increase the credit on the account. Continuing the refund process, payment transactions will be created with an offsetting amount to zero out the interest records and overpayment. Put all together, the account balance should sum to zero.

For the calculation, the subject to penalty amount is based on the credit balance. The credit balance is the sum of the negative charges that were created during the reassessment. Each charge transaction will receive an interest transaction based on the tax year set up, date range, and charge amount. This is very similar to how on demand interest works normally with the exception of how the date range is determined and that the interest amounts are negative.

References

Tax Collection

Changes Prior to Version 6.90

6.87 - Added a Transaction code to the Refund screen which is visible only if the 'Use transaction code for refunds' setting is selected in the Tax system file. 

6.82 - Fixed issue when using on demand interest an application exception would occur in certain instances.

6.80 - Fixed an issue where bills that were over paid after the refund date were being included in the refund process. 

6.77 - Update vendor selection to only show Tax Refund and Temporary vendors

6.51 - Updated logic for refunding, including requiring transactions to have been posted before refunding customers 
- Added on demand interest to refund process so customers are refunded with interest when applicable 
- Made some user interface changes to both the screen and report 

6.17 - Updated logic of screen
- Updated report to follow standards
- Added functionality that will adjust commissions based on refunds