Universal tax engine
A program controlled apparatus, system, and method for determining the transactional taxes due for each item by any taxing authority worldwide. The apparatus comprises a first database comprising a tree structure identifying all of the zones to be examined. A second database comprising all of the taxing authorities is independent from the first zone database. A third database, decoupled from the first and second databases, has data representing the relationship between the data records of the first database and the data records of the second database. Each of the databases can be updated periodically to reflect any changes in identified taxing authorities for the zones over which they may have taxing authority. Furthermore, the present invention provides for an independent, autonomous determination of jurisdiction and tax for each line item and calculates the tax based on any exceptions and exemptions.
1. A method performed by a computer for calculating transactional tax computations, wherein the computer being configured to cause data processing circuitry of a networked computing device to perform tax calculation operations, the method comprising the steps of:
converting by the computer a transaction in a first format to an invoice containing at least one line item;
associating at least one address with the line item;
validating the line item as having at least one valid address;
associating the valid addresses with at least one zone to produce an enhanced line item;
using the zone to associate the enhanced line item with at least one authority;
using the authority associated with the enhanced line item to determine at least one jurisdiction determination method associated with the authority;
using the authority and line item to determine if any exceptions apply to the line item;
applying by the computer any identified exceptions to the line item;
associating at least one tax rule with the line item;
associating a tax rate with the tax rule;
applying by the computer the tax rate to the line item;
storing the result of applying the tax rate in a central storage;
outputting the result of applying the tax rate; and
converting the result of applying the tax rate to a format for transmission.
2. A program controlled apparatus: for calculating any taxes due on a transaction, the apparatus comprising:
an input coordinator for receiving an invoice listing at least one line item; a first database having a table identifying at least one authority; a second database having a table in a tree structure identifying at least one zone; a third database associating the zone with the authority; a fourth database associating the authority with a jurisdiction method; a fifth database associating the authority with an exception method; a sixth database associating the authority with a tax calculation method; a seventh database associating a tax calculation method with a tax rate; and a server having programming for determining all taxes due on the line item according to the authority identified, the zone identified, the jurisdiction method identified, the exception method identified, the tax Calculating method identified and the tax rate identified by the data maintained by the first, second, third, fourth, fifth, sixth, and seventh databases.
3. The program controlled apparatus of claim 2 wherein said first, second, third, fourth, fifth, sixth, and seventh databases are updateable with new data communicated to the apparatus.
4. A method performed by a computer for calculating any taxes due on a transaction, wherein the computer being configured to cause data processing circuitry of a networked computing device to perform tax calculation operations, the method comprising the steps of:
converting by the computer a transaction in a first format to an invoice containing at least one line item;
associating at least one address with the line item;
validating the line item as having at least one valid address;
associating the valid addresses with at least one zone to produce an enhanced line item;
using the zone to associate the enhanced line item with at least one authority;
using the authority associated with the enhanced line item to determine at least one jurisdiction determination method associated with the authority;
using the authority and line item to determine if any exceptions apply to the line item;
applying by the computer any identified exceptions to the line item;
associating at least one tax rule with the line item;
associating a tax rate with the tax rule;
determining if there are any exceptions to the tax rate;
applying by the computer the tax rate to calculate a tax amount;
storing the result of applying the tax rate in a central storage;
outputting the result of applying the tax rate; and
converting the line item and the result of applying the tax rate to a format for transmission.
5. The method of claim 4 wherein the format for transmission is an XML format.
6. A non-transitory computer readable medium having a program saved thereon, said program including instructions for generating a calculated tax due on a transaction, said program causing processing hardware executing said program to carry out at least the following program steps:
converting an input transaction to an invoice containing at least one line item;
associating at least one address with the line item;
validating the line item as having at least one valid address;
associating the valid addresses with at least one zone to produce an enhanced line item;
using the zone to associate the enhanced line item with at least one authority;
using the authority associated with the enhanced line item to determine at least one jurisdiction determination method associated with the authority;
using the authority and line item to determine if any exceptions apply to the line item;
applying any identified exceptions to the line item;
associating at least one tax rule with the line item;
associating a tax rate with the tax rule;
applying the tax rate to the line item;
storing the result of applying the tax rate;
outputting the result of applying the tax rate; and
converting the result of applying the tax rate to a format for transmission.