Sales tax assessment, remittance and collection system

• US 7,716,093 B2
• Filed: 06/14/2001
• Issued: 05/11/2010
• 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.
• Primary Examiner(s): Kramer; James
• Assistant Examiner(s): Maguire; Lindsay M.
• Application Number:
  US09/881,533
• Publication Number:
  US 20020052792A1
• Time in Patent Office: 3,253 Days
• Field of Search: 705/31, 705/19
• US Class Current: 705/31
• 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 assessing point of sale taxation, said method comprising the steps of:

(a) compiling a tax assessment database for commodities identified by uniform commodities codes, said compiling 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 a plurality of 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 hosted on a computer-readable medium;

comparing a client database with an archived client database hosted on a computer-readable medium; and

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

(b) providing a client with said modified client database;

(c) assessing appropriate sales tax for commodities sold by point of sale transactions in at least one of said taxing jurisdictions in reliance upon said uniform commodities code information, said commodities description information and said tax assessment information stored in at least one of said master database and said client 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 further comprising date-tagging said client database.

6. The method of claim 5 further comprising providing a client with said date-tagged client database.

7. The method of claim 1 further comprising archiving said client database on a computer-readable medium.

8. The method of claim 1 further comprising modifying said master database to include uniform commodities code information and commodities information from said client database.

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

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

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

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

13. A method of assessing point of sale taxation, said method comprising the steps of:

(a) compiling a tax assessment database for commodities identified by uniform commodities codes, said compiling 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 a plurality of 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 hosted on a computer-readable medium;

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

(c) comparing said at least one item of uniform commodities code information with said master database;

(d) modifying a client database hosted on a computer-readable medium 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 the client; and

(e) assessing, by the client, at such time that the client chooses to sell said at least one item of uniform commodities code information in at least one taxing jurisdiction of interest, appropriate sales tax for commodities sold by point of sale transactions in the at least one taxing jurisdiction in reliance upon said uniform commodities code information, said commodities description information and said tax assessment information stored in at least one of said master database and said client database.

14. The method of claim 13 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.

15. The method of claim 13 wherein said tax assessment information comprises an indication of whether a commodity is taxable, non-taxable or tax-exempt.

16. The method of claim 15 wherein, if a commodity is indicated as being taxable, said tax assessment information further includes a tax rate associated with the commodity.

17. The method of claim 13 wherein said step of accessing said master database is performed via a broadband network.

18. The method of claim 17 wherein said broadband network is the Internet.

19. The method of claim 13 wherein said taxing jurisdictions comprise local taxing jurisdictions.

20. The method of claim 13 wherein said taxing jurisdictions comprise state taxing jurisdictions.

21. The method of claim 13 wherein said taxing jurisdictions comprise federal taxing jurisdictions.

22. The method of claim 13 wherein said taxing jurisdictions comprise foreign taxing jurisdictions.

23. A method of assessing point of sale taxation, said method comprising the steps of:

(a) compiling a tax assessment database for commodities identified by uniform commodities codes, said compiling 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 clients;

obtaining tax assessment information for commodities for a plurality of taxing jurisdictions;

obtaining jurisdictional boundary information for said taxing jurisdictions; and

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; and

storing said uniform commodities code information, said commodities description information, said jurisdictional boundary information and said tax assessment information in a master database hosted on a computer-readable medium;

(b) assessing appropriate sales tax for commodities sold by point of sale transactions in at least one of said taxing jurisdictions in reliance upon said uniform commodities code information, said commodities description information, said jurisdictional boundary information and said tax assessment information stored in said master database, and collecting sales tax at the point of sale.

24. The method of claim 23 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.

25. The method of claim 23 wherein said tax assessment information comprises an indication of whether a commodity is taxable, non-taxable or tax-exempt.

26. The method of claim 25 wherein, if a commodity is indicated as being taxable, said tax assessment information further includes a tax rate associated with the commodity.

27. The method of claim 23 wherein said taxing jurisdictions comprise local taxing jurisdictions.

28. The method of claim 23 wherein said taxing jurisdictions comprise state taxing jurisdictions.

29. The method of claim 23 wherein said taxing jurisdictions comprise federal taxing jurisdictions.

30. The method of claim 23 wherein said taxing jurisdictions comprise foreign taxing jurisdictions.

31. The method of claim 23 wherein said jurisdictional boundary information comprises postal code data for said taxing jurisdictions.

32. The method of claim 31 wherein said postal code data for said taxing jurisdictions comprises ZIP-related codes.

33. The method of claim 32 wherein said ZIP-related codes comprise five-digit ZIP codes.

34. The method of claim 32 wherein said ZIP-related codes comprise ZIP+4 codes.

35. The method of claim 32 wherein said ZIP-related codes comprise ZIP+6 codes.

36. The method of claim 23 wherein said jurisdictional boundary information comprises latitude and longitude coordinates for said taxing jurisdictions.

37. The method of claim 36 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.

38. The method of claim 36 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.

39. The method of claim 38 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.

40. The method of claim 23 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.

41. The method of claim 40 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.

42. The method of claim 40 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.

43. A method of assessing point of sale taxation, said method comprising the steps of:

(a) compiling a tax assessment database for commodities identified by uniform commodities codes, said compiling comprising the steps of;

obtaining postal code data associated with a plurality of taxing jurisdictions;

obtaining latitude and longitude coordinates data associated with said 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;

storing said latitude and longitude coordinates data for jurisdictional boundaries of said taxing jurisdictions in a master database hosted on a computer-readable medium;

(b) assessing appropriate sales tax for commodities sold by point of sale transactions in at least one of said taxing jurisdictions in reliance upon said latitude and longitude coordinates data for jurisdictional boundaries of said taxing jurisdictions stored in said master database.

44. The method of claim 43 wherein said postal code data for said taxing jurisdictions comprises ZIP-related codes.

45. The method of claim 44 wherein said ZIP-related codes comprise five-digit ZIP codes.

46. The method of claim 44 wherein said ZIP-related codes comprise ZIP+4 codes.

47. The method of claim 44 wherein said ZIP-related codes comprise ZIP+6 codes.

48. The method of claim 43 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.

49. A method of assessing point of sale taxation, said method comprising the steps of:

(a) compiling a tax assessment database for commodities identified by uniform commodities codes, said compiling comprising the steps of;

obtaining postal code data associated with a plurality of 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;

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

storing said FIPS and MCD code data for jurisdictional boundaries of said taxing jurisdictions in a master database hosted on a computer-readable medium;

(b) assessing appropriate sales tax for commodities sold by point of sale transactions in at least one of said taxing jurisdictions in reliance upon said FIPS and MCD code data for jurisdictional boundaries of said taxing jurisdictions stored in said master database.

50. The method of claim 49 wherein said postal code data for said taxing jurisdictions comprises ZIP-related codes.

51. The method of claim 50 wherein said ZIP-related codes comprise five-digit ZIP codes.

52. The method of claim 50 wherein said ZIP-related codes comprise ZIP+4 codes.

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