Sales tax assessment, remittance and collection system

• US 20020052792A1
• Filed: 06/14/2001
• Published: 05/02/2002
• Est. Priority Date: 06/14/2000
• Status: Active Grant

• Current Assignee: Avalara Incorporated
• Original Assignee: Tax Matrix Technologies LLC
• Inventors: Johnson, Kevin C., Plater-Zyberk, Josaphat A., Ridley, John O., Johnson, Brendan P.
• Granted Patent: US 7,716,093 B2
• Time in Patent Office: Days
• US Class Current: 705/19
• CPC Class Codes: G06Q 20/207 Tax processing
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/123 Tax preparation or submission

Abstract

An adaptive computerized system of assessing the taxability of goods or services sold at retail or wholesale. The system has the capability to conduct an analysis of all products and/or services sold by a retailer or wholesaler either offline or online and provide the seller with the ability to monitor the tax status, including tax rates, of any goods or services sold by the seller at the point of sale or online in any number of taxing jurisdictions. The system includes a master database which links uniform commodities code technology such as UPC to tax assessment information for goods and/or services sales transactions made by any number of merchants in potentially unlimited taxing jurisdictions. The system also automatically generates tax collection and remittance reports and submit such report and the tax payment to the appropriate taxing jurisdictions.

Claims

1. A method of compiling a tax assessment database for commodities identified by uniform commodities codes, said method comprising the steps of:

gathering uniform commodities code information and commodities description information corresponding to said uniform commodities code information from a plurality of clients;

gathering tax assessment information for each of said commodities for desired taxing jurisdictions;

correlating said uniform commodities code information and said commodities description information with said tax assessment information; and

storing said uniform commodities code information, said commodities description information and said tax assessment information in a master database.

2. The method of claim 1 wherein said uniform commodities code information is selected from the group consisting of the Universal Product Code (UPC) system, the Universal Service Code (USC) system, the International Standard Book Number (ISBN) system, the International Standard Serial Number (ISSN) system, the Global Service Relation Number (GSRN) system, and the European Article Numbering (EAN) system.

3. The method of claim 1 wherein said tax assessment information comprises an indication of whether a commodity is taxable, non-taxable or tax-exempt.

4. The method of claim 3 wherein, if a commodity is indicated as being taxable, said tax assessment information further includes a tax rate associated with the commodity.

5. The method of claim 1 wherein said taxing jurisdictions comprise local taxing jurisdictions.

6. The method of claim 1 wherein said taxing jurisdictions comprise state taxing jurisdictions.

7. The method of claim 1 wherein said taxing jurisdictions comprise federal taxing jurisdictions.

8. The method of claim 1 wherein said taxing jurisdictions comprise foreign taxing jurisdictions.

9. The method of claim 1 further comprising the steps of comparing a new client database with said master database, and modifying said master database to include information from said new client database.

10. The method of claim 1 further comprising the steps of comparing a new client database with said master database, and modifying said new client database to include information from said master database.

11. The method of claim 10 further comprising date-tagging said new client database.

12. The method of claim 11 further comprising providing a new client with said date-tagged new client database.

13. The method of claim 10 further comprising providing a new client with said modified new client database.

14. The method of claim 10 further comprising archiving said new client database.

16. The method of claim 15 wherein said uniform commodities code information is selected from the group consisting of the Universal Product Code (UPC) system, the Universal Service Code (USC) system, the International Standard Book Number (ISBN) system, the International Standard Serial Number (ISSN) system, the Global Service Relation Number (GSRN) system, and the European Article Numbering (EAN) system.

17. The method of claim 15 wherein said tax assessment information comprises an indication of whether a commodity is taxable, non-taxable or tax-exempt.

18. The method of claim 17 wherein, if a commodity is indicated as being taxable, said tax assessment information further includes a tax rate associated with the commodity.

19. The method of claim 15 further comprising date-tagging said client database.

20. The method of claim 19 further comprising providing a client with said date-tagged client database.

21. The method of claim 15 further comprising providing a client with said modified client database.

22. The method of claim 15 further comprising archiving said client database.

23. The method of claim 15 further comprising modifying said master database to include uniform commodities code information and commodities information from said client database.

24. The method of claim 15 wherein said taxing jurisdictions comprise local taxing jurisdictions.

25. The method of claim 15 wherein said taxing jurisdictions comprise state taxing jurisdictions.

26. The method of claim 15 wherein said taxing jurisdictions comprise federal taxing jurisdictions.

27. The method of claim 15 wherein said taxing jurisdictions comprise foreign taxing jurisdictions.

29. The method of claim 28 wherein said uniform commodities code information is selected from the group consisting of the Universal Product Code (UPC) system, the Universal Service Code (USC) system, the International Standard Book Number (ISBN) system, the International Standard Serial Number (ISSN) system, the Global Service Relation Number (GSRN) system, and the European Article Numbering (EAN) system.

30. The method of claim 28 wherein said tax assessment information comprises an indication of whether a commodity is taxable, non-taxable or tax-exempt.

31. The method of claim 30 wherein, if a commodity is indicated as being taxable, said tax assessment information further includes a tax rate associated with the commodity.

32. The method of claim 28 wherein said step of accessing said master database is performed via a broadband network.

33. The method of claim 32 wherein said broadband network is the Internet.

34. The method of claim 28 wherein said taxing jurisdictions comprise local taxing jurisdictions.

35. The method of claim 28 wherein said taxing jurisdictions comprise state taxing jurisdictions.

36. The method of claim 28 wherein said taxing jurisdictions comprise federal taxing jurisdictions.

37. The method of claim 28 wherein said taxing jurisdictions comprise foreign taxing jurisdictions.

39. The method of claim 38 wherein said uniform commodities code information is selected from the group consisting of the Universal Product Code (UPC) system, the Universal Service Code (USC) system, the International Standard Book Number (ISBN) system, the International Standard Serial Number (ISSN) system, the Global Service Relation Number (GSRN) system, and the European Article Numbering (EAN) system.

40. The method of claim 38 wherein said tax assessment information comprises an indication of whether a commodity is taxable, non-taxable or tax-exempt.

41. The method of claim 40 wherein, if a commodity is indicated as being taxable, said tax assessment information further includes a tax rate associated with the commodity.

42. The method of claim 38 wherein said taxing jurisdictions comprise local taxing jurisdictions.

43. The method of claim 38 wherein said taxing jurisdictions comprise state taxing jurisdictions.

44. The method of claim 38 wherein said taxing jurisdictions comprise federal taxing jurisdictions.

45. The method of claim 38 wherein said taxing jurisdictions comprise foreign taxing jurisdictions.

46. The method of claim 38 wherein said jurisdictional boundary information comprises postal code data for said taxing jurisdictions.

47. The method of claim 46 wherein said postal code data for said taxing jurisdictions comprises ZIP-related codes.

48. The method of claim 47 wherein said ZIP-related codes comprise five-digit ZIP codes.

49. The method of claim 47 wherein said ZIP-related codes comprise ZIP+4 codes.

50. The method of claim 47 wherein said ZIP-related codes comprise ZIP+6 codes.

51. The method of claim 38 wherein said jurisdictional boundary information comprises latitude and longitude coordinates for said taxing jurisdictions.

52. The method of claim 51 wherein said latitude and longitude coordinates comprise latitude and longitude data collected while traversing a path via a receiver in communication with satellites of the global positioning system.

53. The method of claim 51 further comprising comparing a physical address related to purchase of at least one commodity with said latitude and longitude data to determine in which of said taxing jurisdictions the commodity is subject to sales taxation.

54. The method of claim 53 wherein said physical address is selected from the group consisting of a billing address, delivery address, an address of a point of consumption of services, an address of a point of rendering of services, and an address of a service provider.

55. The method of claim 38 wherein said jurisdictional boundary information comprises census data associated with said taxing jurisdictions and processing said census data such that counties receive a unique Federal Information Processing Standard (FIPS) code and smaller jurisdictions receive a unique Minor Civil Division (MCD) code.

56. The method of claim 55 further comprising comparing a physical address related to purchase of at least one commodity with at least one of said FIPS codes and said MCD codes to determine in which of said taxing jurisdictions the commodity is subject to sales taxation.

57. The method of claim 55 wherein said physical address is selected from the group consisting of a billing address, delivery address, an address of a point of consumption of services, an address of a point of rendering of services, and an address of a service provider.

59. The method of claim 58 wherein said postal code data for said taxing jurisdictions comprises ZIP-related codes.

60. The method of claim 59 wherein said ZIP-related codes comprise five-digit ZIP codes.

61. The method of claim 59 wherein said ZIP-related codes comprise ZIP+4 codes.

62. The method of claim 59 wherein said ZIP-related codes comprise ZIP+6 codes.

63. The method of claim 58 wherein said step of gathering latitude and longitude coordinates data comprises traversing a path and collecting latitude and longitude data via a receiver in communication with satellites of the global positioning system.

15. A method of maintaining a client tax assessment database for commodities identified by uniform commodities codes, said method comprising the steps of:

gathering uniform commodities code information and commodities description information corresponding to said uniform commodities code information from a plurality of clients;

gathering tax assessment information for each of said commodities for desired taxing jurisdictions;

correlating said uniform commodities code information and said commodities description information with said tax assessment information;

storing said uniform commodities code information, said commodities description information and said tax assessment information in a master database;

comparing said client database with an archived client database; and

modifying said client database to include updated tax assessment information from said master database.

28. A method of maintaining a client tax assessment database for commodities identified by uniform commodities codes, said method comprising the steps of:

gathering uniform commodities code information and commodities description information corresponding to said uniform commodities code information from a plurality of clients;

gathering tax assessment information for each of said commodities for desired taxing jurisdictions;

correlating said uniform commodities code information and said commodities description information with said tax assessment information;

storing said uniform commodities code information, said commodities description information and said tax assessment information in a master database;

accessing said master database by a client, said client inquiring as to the tax assessment characteristics of at least one item of uniform commodities code information;

comparing said at least one item of uniform commodities code information with said master database; and

modifying said client database to include updated tax assessment information from said master database for said at least one item of uniform commodities code information for at least one taxing jurisdiction of interest to said client.

38. A method of determining the tax status for commodities identified by uniform commodities codes, said method comprising the steps of:

obtaining uniform commodities code information and commodities description information corresponding to said uniform commodities code information, wherein said uniform commodities code information and said commodities description information are gathered from a plurality of sources;

obtaining tax assessment information for commodities in desired taxing jurisdictions;

obtaining jurisdictional boundary information for said taxing jurisdictions;

correlating said uniform commodities code information, said commodities description information and said jurisdictional boundary information with said tax assessment information to determine the tax status for said commodities in said taxing jurisdictions.

58. A method of compiling a jurisdictional boundary database for desired taxing jurisdictions, said method comprising the steps of:

obtaining postal code data associated with said desired taxing jurisdictions;

obtaining latitude and longitude coordinates data associated with said desired taxing jurisdictions; and

combining said postal code data and said latitude and longitude coordinates data to establish latitude and longitude coordinates data for jurisdictional boundaries of said taxing jurisdictions.

64. A method of compiling a jurisdictional boundary database for desired taxing jurisdictions, said method comprising the steps of:

obtaining postal code data associated with said desired taxing jurisdictions;

obtaining census data associated with said taxing jurisdictions and processing said census data such that counties receive a unique Federal Information Processing Standard (FIPS) code and smaller jurisdictions receive a unique Minor Civil Division (MCD) code; and

combining said postal code data and said census data to establish FIPS and MCD code data for jurisdictional boundaries of said taxing jurisdictions.

65. The method of claim 64 wherein said postal code data for said taxing jurisdictions comprises ZIP-related codes.

66. The method of claim 65 wherein said ZIP-related codes comprise five-digit ZIP codes.

67. The method of claim 65 wherein said ZIP-related codes comprise ZIP+4 codes.

68. The method of claim 65 wherein said ZIP-related codes comprise ZIP+6 codes.

70. The method of claim 69 wherein said physical address is selected from the group consisting of a billing address, delivery address, an address of a point of consumption of services, an address of a point of rendering of services, and an address of a service provider.

69. A method of determining a tax status for a commodity, said method comprising the steps of:

identifying a physical address related to purchase of at least one commodity;

assigning latitude and longitude coordinates to said physical address;

comparing said latitude and longitude coordinates with taxing jurisdiction latitude and longitude coordinates boundary data to determine a taxing jurisdiction for said physical address; and

applying a tax status to the commodity that is appropriate for the taxing jurisdiction in which said physical address is located.

71. A method of determining a tax status for a commodity, said method comprising the steps of:

identifying a physical address related to purchase of at least one commodity;

comparing said physical address with at least one of a Federal Information Processing Standard (FIPS) code and a Minor Civil Division (MCD) code to determine in which taxing jurisdiction said point of delivery address is located; and

applying a tax status to the commodity that is appropriate for the taxing jurisdiction in which said physical address is located.

72. The method of claim 71 wherein said physical address is selected from the group consisting of a billing address, delivery address, an address of a point of consumption of services, an address of a point of rendering of services, and an address of a service provider.

73. A method of determining a tax status for a commodity, said method comprising the steps of:

identifying a physical address related to purchase of at least one commodity, said physical address including a ZIP+6 code;

comparing said ZIP+6 code with a compilation of ZIP+6 codes to determine a taxing jurisdiction for said physical address; and

applying a tax status to the commodity for the taxing jurisdiction in which said physical address is located.

74. The method of claim 73 wherein said physical address is selected from the group consisting of a billing address, delivery address, an address of a point of consumption of services, an address of a point of rendering of services, and an address of a service provider.

75. A method of conducting a commodities sales transaction via a broadband network, said method comprising the steps of:

electronically providing, by a merchant, commodities for purchase using the broadband network;

electronically selecting, by a purchaser, at least one of the commodities for purchase using the broadband network;

electronically providing, by a merchant, a menu of sales tax exemption codes for each of the commodities electronically selected for purchase by the purchaser; and

electronically selecting, by the purchaser, an appropriate sales tax exemption code from said menu for each of the commodities electronically selected for purchase by the purchaser.

76. The method of claim 75 further comprising using a physical address related to purchase of said commodities to determine at least one taxing jurisdiction and tax assessment status for each of said commodities that are electronically selected for purchase by the purchaser.

77. The method of claim 76 wherein said physical address is selected from the group consisting of a billing address, delivery address, an address of a point of consumption of services, an address of a point of rendering of services, and an address of a service provider.

78. The method of claim 76 wherein said tax assessment status comprises an indication of whether a commodity is taxable, non-taxable or tax-exempt.

79. The method of claim 78 wherein, if a commodity is indicated as being taxable, said tax assessment information further includes a tax rate associated with the commodity.

80. The method of claim 76 wherein said step of using a physical address related to purchase of said commodities to determine at least one taxing jurisdiction and tax assessment status for each of said commodities is performed by a system administrator.

81. The method of claim 77 wherein said broadband network is the Internet.

83. The method of claim 80 wherein the method is conducted via a broadband network.

84. The method of claim 83 wherein said broadband network is the Internet.

82. A method of assessing, collecting and remitting sales tax for commodities, said method comprising the steps of:

receiving, by a merchant and from a purchaser, a purchase selection for at least one commodity, said purchase selection including a physical address related to purchase of said at least one commodity and uniform commodities code information for said at least one commodity;

transmitting, by the merchant, said physical address and uniform commodities code information for said at least one commodity to a system administrator including a master database, said master database including (i) said uniform commodities code information associated with said at least one commodity, and (ii) tax status information associated with said at least one commodity for a taxing jurisdiction in which said physical address is located;

determining and applying, by the system administrator, the tax status for said at least one commodity in said taxing jurisdiction;

transmitting, from the system administrator to the merchant, the tax status for said at least one commodity in said taxing jurisdiction;

directing, by the merchant, transfer of transactional costs and tax for said at least one commodity in said taxing jurisdiction from a lending institution chosen by the purchaser to a bank chosen by the merchant; and

remitting, by the bank chosen by the merchant to an escrow account of said taxing jurisdiction, the tax for said at least one commodity.

85. The method of claim 82 further comprising reporting, by the system administrator to said taxing jurisdiction, the appropriate tax for said at least one commodity.

86. The method of claim 85 further comprising amassing taxes collected by the bank chosen by the merchant for a predetermined number of commodities sales transactions or for a predetermined period of time and then remitting said amassed taxes to appropriate taxing jurisdiction accounts and reporting said amassed taxes to appropriate taxing jurisdictions.

87. The method of claim 82 wherein said physical address is selected from the group consisting of a billing address, delivery address, an address of a point of consumption of services, an address of a point of rendering of services, and an address of a service provider.