Presented by:

Dan Sullivan, CEOAssisted by:

Scott H. Walters, Vice President, Research & DevelopmentJon W. Abolins, Director, Tax Department

Transaction Tax Serveras an eCommerce

Tax Solution

TAXWARE International’s

Adapting Tax Technology

• Sales/Use Tax & WORLDTAX Systems

¤ Address driven (privacy)

¤ Customizable by Merchant

¤ Handles exempt sales by product or customer exemption

¤ Creates Audit trails

¤ Generates Tax Forms or records for electronic transmission

• The Transaction Tax Server (TTS)

• The “no fault” concept and TTS

Existing TAXWARE SystemsThe SALES/USE Tax System

PRODUCTTAX

RULES

TAXRATES

ReMIT(Compliance)

AuditFile

STEP(CustomerExemption)

TAXCALCULATION

(S/U Tax)(WorldTax)

UNIVERSALTAX LINK

(Data)

MERCHANTPROCESSING

VERAZIP(Address

Verify)

MERCHANTDATA(Nexus,

Address, Etc.)

Existing TAXWARE SystemsThe ReMIT System

• Platform independent

• Supports all

TAXWARE systems

• Internet-ready for

eCommerce reporting

Transaction Tax Server

MerchantData

(Nexus, ID, etc.)

ProductTax Rates

StandardTax Rates

Tax Data

AddressVerification

Transaction Data

Buyer

Merchant

TAXWARE CalculationEngine

TAXWARE Transaction

Server

The Server Concept allows tax processing from a variety of sources, using either batch or real timeprocessing.

Large scalecomputerSystems

Laptops

Handhelds

Desktops

Transaction Tax Server

MerchantData

(Nexus, ID, etc.)

ProductTax Rates

StandardTax Rates

AddressVerification

“NOFault!”Tax Data & Tax $$

TaxAuthority

Tax Data & Purchase $$

Merchant

TAXWARE CalculationEngine

Transaction Data

Buyer

Merchant

TaxAuthorityExempt Certificate

WarehouseCertificate Updates

TAXWARE CalculationEngine

Transaction Tax Server

ProductTax Rates

StandardTax Rates

AddressVerification

MerchantData

Tax Authoritieswould make

Exempt CertificateFiles available to the Transaction Server

Tax Server Tax Authority

Using TAXWARE’s ReMIT as a “Data Highway”

TAXWARETax Calc.

Audit File

TAXWARE’s ReMIT

SummaryTAXWARE’s

ReMIT

InternetTransmission

Summary

Other Tax Sources

Audit File

Mapping Software

Audit File

Merchant

TTS Benefits to the Merchant • The Merchants would no longer have to;

-monitor tax rate changes-monitor tax law changes-maintain in-house tax Systems

• Transaction based fees - even the smallest of Merchants could afford it

If “no fault” is implementedBenefits to the Merchant• No longer required to collect taxes• No longer required to complete & submit complicated tax forms & payments• Fewer or no time consuming audits

“No Fault” Benefits to The Tax Authorities

• No need to change existing tax laws or rules• Tax Authorities receive revenues & data at the time of the transaction• Tax Authorities can supply data directly to the serverand monitor the application of rates & laws• Tax Authorities can continue to use existing back officeSystems - the cost to convert is relatively minor• Audit overhead is reduced - Merchants are offered a“fault free” option for using the TTS• The TTS Concept along with “No Fault” offers the Tax Authorities an opportunity to simplify taxes

TaxAuthority

TaxAuthorityExempt Certificate

WarehouseCertificate Updates

TAXWARE CalculationEngine

Merchant

Transaction Tax Server

MerchantData

(Nexus, ID, etc.)

ProductTax Rates

StandardTax Rates

AddressVerification

Transaction Data

Tax Data & Tax $$

Tax Data & Merchandise $$

THEEND