Real Time Tax Calculation System
Accurately determining the taxability of a sale in real time, and without impeding the flow of the transaction, is a very complex process, stemming from the many issues that affect the tax determination. These issues range from establishing the location of the transaction with high levels of accuracy; identifying the products and services being sold; and the parties involved in the transaction.
Many systems determine transaction location by using the zip or zip+4 alone. This is inaccurate. With over 10,000 taxing jurisdictions in the U.S. alone, using zip will oftentimes result in applying incorrect taxes to a transaction. Only a system that determines the location of the transaction using the actual physical address, rather than relying on zip or zip+4 alone, assures you that the correct tax location is identified, and with it, the correct taxes are applied to the transaction.
Once the location is identified, it is not enough to simply apply a tax rate to the sales amount. The tax engine needs to evaluate the tax rules for each product being sold, is it taxed?; is it exempt from taxes?; are there special rules that may apply (such as a tax holiday?; a reduced tax rate?). Only a tax engine that looks at each line item and determines the taxability and tax rules of each line assures you that the correct tax rate is applied.
This is no small task but the EXACTOCALC module can do it all, with ease and efficiency, all this in real-time, without slowing down or impacting the sales transaction, completely transparent to the buyer.
The EXACTOCALC module will improve accuracy and reliability of your tax calculations. To achieve these results, the EXACTOCALC module:
- Cleans and validates the physical address using a proprietary system certified by the US Postal Service for its accuracy;
- Determines the location of the transaction by the actual physical address;
- Evaluates the tax rules of each line item within the sale transaction,
- Is each product taxable? or exempt?
- Are there any special tax rates that should be applied?
- Is the purchased product subject to any min or max threshold?
- Is there any tax holiday that should be applied?
- Evaluates whether the buyer is exempt from taxes.
The EXACTOCALC module will then calculate the taxes in real time and insert the taxes into the sale transaction all this transparently to the user. There is no impact upon the sale transaction.
The EXACTOCALC module can be easily and seamlessly integrated into any business and transaction platform where real time calculation is required, eCommerce shopping carts, accounting programs, ERP systems. Exactor’s automated wizards provide automated integration into many systems, and its SDK provides easy integration into more customized environments.