Why don't taxes collected perfectly match taxes to file?

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The simple answer is, rounding errors.  If you evaluate taxes in a report on a per product sold basis there is a rounding error that occurs with each product.  For example $10.99 X 6.275% tax = .6896225 in tax (which would round up).  The same amount of tax on an $8.99 item would be .5641225, which would round down.

When we compute the actual amount the customer is going to pay, we perform this multiplication on a per transaction basis, not a per line basis (1 rounding error per transaction).  When you view a report showing the items you sold individually and the tax collected it becomes impossible to show you exactly the same data (1 rounding error per transaction line).  When you go to pay the state, they use a different calculation - the tax percentage times the ENTIRE amount of sales of a certain type done in a month (1 rounding error per month).  Due to this, it's natural for there to be small discrepancies.

If you'd like the very long answer from a CPA - here you go:

Enjoy! :)
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