Presented by: Dan Sullivan, CEO Assisted by: Scott H. Walters, Vice President, Research & Development Jon W. Abolins, Director, Tax Department Transaction Tax Server as 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 Systems The SALES/USE Tax System PRODUCT TAX RULES TAX RATES ReMIT (Compliance) Audit File STEP (Customer Exemption) TAX CALCULATION (S/U Tax) (WorldTax) UNIVERSAL TAX LINK (Data) MERCHANT PROCESSING VERAZIP (Address Verify) MERCHANT DATA (Nexus, Address, Etc.)

Existing TAXWARE Systems The ReMIT System Platform independent Supports all TAXWARE systems Internet-ready for eCommerce reporting

Transaction Tax Server Merchant Data (Nexus, ID, etc.) Product Tax Rates Standard Tax Rates Tax Data Address Verification Transaction Data Buyer Merchant TAXWARE Calculation Engine

TAXWARE Transaction Server The Server Concept allows tax processing from a variety of sources, using either batch or real time processing. Large scale computer Systems Laptops Handhelds Desktops

Transaction Tax Server Merchant Data (Nexus, ID, etc.) Product Tax Rates Standard Tax Rates Address Verification “NO Fault!” Tax Data & Tax $$ Tax Authority Tax Data & Purchase $$ Merchant TAXWARE Calculation Engine Transaction Data Buyer Merchant

Tax Authority Exempt Certificate Warehouse Certificate Updates TAXWARE Calculation Engine Transaction Tax Server Product Tax Rates Standard Tax Rates Address Verification Merchant Data Tax Authorities would make Exempt Certificate Files available to the Transaction Server

Tax ServerTax Authority Using TAXWARE’s ReMIT as a “Data Highway” TAXWARE Tax Calc. Audit File TAXWARE’s ReMIT Summary TAXWARE’s ReMIT Internet Transmission 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 implemented Benefits 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 server and monitor the application of rates & laws Tax Authorities can continue to use existing back office Systems - 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 Tax Authority

Tax Authority Exempt Certificate Warehouse Certificate Updates TAXWARE Calculation Engine Merchant Transaction Tax Server Merchant Data (Nexus, ID, etc.) Product Tax Rates Standard Tax Rates Address Verification Transaction Data Tax Data & Tax $$ Tax Data & Merchandise $$ THE END