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Systems and methods for determining taxes owed for financial transactions conducted over a network

  • US 8,099,329 B2
  • Filed: 12/12/2006
  • Issued: 01/17/2012
  • Est. Priority Date: 04/25/2006
  • Status: Active Grant
First Claim
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1. A tax accounting system for financial transactions conducted with online merchants, the system comprising:

  • a memory configured for storing one or more types of tax and corresponding taxation rates for each of one or more tax jurisdictions; and

    a processor configured for;

    receiving a settlement request, the settlement request comprising settlement information associated with a plurality of financial transactions conducted between an online merchant and one or more customers, the settlement request requesting transfer of funds from one or more accounts associated with the one or more customers for payment to the online merchant in regard to the plurality of financial transactions;

    submitting the settlement request to an acquiring bank;

    receiving a payment report from the acquiring bank, the payment report comprising payment information associated with a payment to be received for each of the plurality of financial transactions associated with the settlement request;

    in response to receiving the payment report;

    reconciling each of the plurality of financial transactions by comparing the settlement information for a particular financial transaction with the payment information for the particular financial transaction; and

    identifying each of the plurality of financial transactions that reconcile; and

    for each identified financial transaction that reconciles;

    identifying one or more tax jurisdictions associated with the financial transaction based on the information associated with the financial transaction;

    in response to identifying the one or more tax jurisdictions associated with the financial transaction, querying the memory to determine whether one or more types of tax are associated with the one or more tax jurisdictions;

    in response to determining that one or more types of tax are associated with the one or more tax jurisdictions, applying the corresponding taxation rates for each of the one or more types of tax to the information associated with the financial transaction to determine an amount of tax owed; and

    in response to determining the amount of tax owed;

    obtaining the funds being transferred from the acquiring bank for payment to the online merchant for the financial transaction;

    deducting the amount of tax owed from the funds;

    transferring the amount of tax owed to one or more relevant tax authorities; and

    transferring remaining funds comprising the funds less the amount of tax owed to the online merchant.

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