Introduction to Tax Jurisdiction Assignment - GeoTAX_Premium - 7 - 7.7

GeoTAX Premium for Windows, UNIX/Linux, and z/OS

Product type
Software
Portfolio
Verify
Product family
Geo Addressing
Product
GeoTAX Premium
Version
7.7
Language
English
Product name
GeoTAX Premium
Title
GeoTAX Premium for Windows, UNIX/Linux, and z/OS
Copyright
2023
First publish date
1998
ft:lastEdition
2023-10-19
ft:lastPublication
2023-10-19T16:49:54.924301

Tax exposure is an issue that companies deal with regularly. Since the majority of all taxes that companies pay are based upon local tax jurisdictions, it has become important for them to ensure that they are applying the correct tax rates for all of their customer billing. This creates the problem of accurately determining the tax jurisdiction for a customer’s address.

Most companies use simple cross-reference tax tables which link 9-digit ZIP+4 or 5-digit ZIP Codes and tax jurisdiction names to the tax rate. This approach has a high margin of error, as the geographic area 9-digit ZIP+4 or 5-digit ZIP Code corresponds to can cross tax jurisdictions and even county boundaries, making it difficult to assign the correct jurisdiction and tax rate to a given address.

For example, consider the following address: 5400 High School Ave., Dallas, TX 75205. This address is located within the incorporated jurisdiction of Highland Park, FIPS place code 33824. Another piece of data available, the class code, indicates that Highland Park is an active incorporated place. In this example, relying on the mailing address to calculate the tax results in the incorrect tax jurisdiction assignment of Dallas, Texas. Many addresses are assigned to a post office (with an assigned postal city name) but are actually located in other jurisdictions, including different counties and cities serviced by that post office. Many addresses are outside of city limits. In all these cases, the jurisdiction names and codes assigned by GeoTAX are different from the postal city name or postal county name assigned to that post office.