AvaTax provides a couple of methods for refunding transactions. The method that you choose depends on your particular refund scenario.

Use the RefundTransaction API to create a ReturnInvoice representing a refund for a previously created SalesInvoice transaction. Specifically, you can:
- Create a full refund of a previous sale that included sales tax only. Don't use the RefundTransaction API for transactions that result in tax other than sales tax.
- Refund the sales tax that was charged on a previous sale, such as when the customer provides an exemption certificate after the purchase.
- Refund one or more items (lines) from a previous sale.
- Grant a customer a percentage refund of a previous sale.

Use the CreateTransaction API with a document type of ReturnInvoice to create a custom refund transaction for more complex scenarios such as the following:

The next sections discuss these scenarios in greater detail. You can also find more information in the RefundTransaction vs ReturnInvoice in the AvaTax API blog.

Refund processing is largely a business practice that the developer and the business manager need to map out before coding or moving forward to a production environment. A thorough understanding of the RefundTransaction and CreateTransaction APIs and document types is key to developing an architecture suitable for processing returns in your development.

Refund methods in AvaTax