Let’s assume a cancel / rebill occurs after a payment is received and the net effect of the cancel / rebill is that the customer has overpaid their taxes.

You'll notice that the amount payable to the taxing authority still indicates $10 (the amount of tax that was paid by the customer). However, you'll notice that the tax holding balance is 7.50 (debit). This looks a bit odd, but it's correct. Remember that at this point, the customer has a credit balance of $75 and this will be whittled down as successive bills are produced as shown below. Note: refer to Cash Refunds for an example of what happens if you refund the credit with a check rather than letting it whittle down.

In the unlikely event of a payment being received while the tax holding has a debit balance, nothing will be done in respect of transferring funds from holding to payable (there is nothing to transfer).