Vertex Retail Product Guide

Vertex IndirectTaxforRetail
ProductGuide
February,2011
TABLEOFCONTENTS
Introduction........................................................................................................................................................................................................1 VertexPositionintheRetailIndustry............................................................................................................................................1 BenefitsofAutomatingTheRetailTaxOperation....................................................................................................................1 VertexIndirectTaxOSeries...................................................................................................................................................................1 Overview.....................................................................................................................................................................................................1 Architecture...............................................................................................................................................................................................2 ComprehensiveContentSupportedbyVertexResearchProfessionals......................................................................3 RequirementsforInitialSetupofVertexOSeries....................................................................................................................4 ProductGroupingCodes......................................................................................................................................................................4 WhenProductGroupingCodesarenotSensitizedforTax...................................................................................................6 SalesTaxCalculationTheProcess................................................................................................................................................6 CustomerExemptions...........................................................................................................................................................................8 VertexAddressCleansing.................................................................................................................................................................9 VertexIndirectTaxforRetail................................................................................................................................................................10 Overview..................................................................................................................................................................................................10 TransactionsUniquetoRetailers..................................................................................................................................................11 VertexRetailDeploymentModels.........................................................................................................................................................13 RetailTaxExtract(RTE)Deployment.........................................................................................................................................13 LocalIndirectTaxEngine(LITE)Deployment........................................................................................................................16 ReportingandCompliance........................................................................................................................................................................18 Reporting.................................................................................................................................................................................................18 VertexReportingandAnalysis.....................................................................................................................................................19 VertexSales&UseTaxReturns..................................................................................................................................................20 VertexIndirectTaxOSeriesanEndtoendEnterpriseTaxSolution...........................................................................21 CapabilitytoStartanywhereforCentralizedTaxAutomation........................................................................................21 HardwareandSoftwareRequirements...............................................................................................................................................23 UserInterface.........................................................................................................................................................................................23 DatabaseServer....................................................................................................................................................................................23 ApplicationServerandJavaAPI....................................................................................................................................................23 SupportofVirtualizationEnvironments....................................................................................................................................23 AboutVertexInc............................................................................................................................................................................................24 AboutVertexConsultingServices.......................................................................................................................................................24 AppendixA:StandardReports................................................................................................................................................................25 AppendixB:SoftwareRequirementsfortheApplicationServerandtheJavaAPI.........................................................26 WebService............................................................................................................................................................................................26 JavaAPI.....................................................................................................................................................................................................27 ApplicationServers.............................................................................................................................................................................28 Glossary.............................................................................................................................................................................................................30
VertexInc.ProprietaryandConfidential
VertexRetailSolutions
INTRODUCTION
VERTEXPOSITIONINTHERETAILINDUSTRY
Vertexhasover30yearsofexperiencedeliveringhighqualitysolutionsfortaxprofessionalsinthearea ofindirecttaxcalculationandcompliance.Withmorethan300retailcustomers,andpartnershipswith majorPointofsale(POS)andEnterpriseResourcePlanning(ERP)systemvendors,Vertexhasacquireda firmunderstandingofthespecialneedsandrequirementsoftheretailindustryandthetechnology trendsthatwillimpactyourinfrastructure. VertexisamemberoftheNationalRetailFederation(NRF).Vertexisalsoanactivecontributing memberoftheAssociationforRetailTechnologyStandards(ARTS)committeeoftheNRF.ARTSis charteredtohelpdefinethestandardsforcalculationofsalestaxandtheconsolidationoftaxresults, bothdomesticallyandglobally.
BENEFITSOFAUTOMATINGTHERETAILTAXOPERATION
Automatingtheprocessingofindirecttaxesdeliversimmediatetangiblebenefits.Retailcustomersof Vertexhaveexperiencedmost,ifnotall,ofthefollowing: Costsavingsfromeliminationofmanualprocesses Fewerproblematicaudits LessrelianceonITresources Increasedaccuracyoftaxcalculationsacrossallchannels PositiveROIinashorttimeframe Abilitytoscaletoadapttogrowth Overallimprovedcompanybottomline
VERTEXINDIRECTTAXOSERIES
OVERVIEW
VertexIndirectTaxOSeries(VertexOSeries)isanintegralcomponentofallVertexIndirectTaxfor Retail(VertexRetail)implementations.VertexOSeriesmanagestaxonbothsalesandusetax transactions;itiscompletelyscalabletosupportgrowthandexpansion;andsinceitisalsocapableof processingvalueaddedtaxes(VAT),itdeliverscomplianceforcompaniesoperatingintheglobal marketplace. WithWebbasedaccess,VertexOSeriesenablesyoutocentrallymanageandmaintainalltax complianceactivitiesfromasingleinstance.Inaddition,sinceVertexOSerieswillinterfaceseamlessly withyourcompanysERPorfinancialsystem,implementationisefficientandcosteffective.TheVertex OSeriesplatformprovidesanadvancedarchitectureforintegratingabroadrangeoftaxcompliance featuresintoasingle,seamlessapplicationsuite(Figure1).
VertexInc.Proprietary&Confidential
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VertexOSeriessignificantlyreducesthecomplexitiesandexpenseofmultistateandglobaltax complianceprocessesforyourorganization.Toachieveandmaintainanefficienttaxcompliance process,VertexOSeriescalculatestaxbasedonacombinationofVertextaxresearchandyour customizationsofjurisdictionrates,exceptionsandexemptions.Italsosupportsprecisesitus determination,tieredtax,maximumbasistax,maximumtaxamounttax,compoundtaxandcomplex roundingrules.ComplianceisachievedwiththeadditionofVertexSalesandUseTaxReturns.And,the systemprovidesuserswithextensivereportingcapabilities.
Figure1VertexOSeriesPlatform
ARCHITECTURE
TheVertexOSeriesplatformprovidesanadvancedarchitectureforintegratingabroadrangeoftax compliancefeaturesintoasingle,seamlessapplicationsuite.VertexOSeriesiscompletelyplatform independentformaximumflexibilityandcostsavingsprovidingeasy,flexibledeploymentinavarietyof operatingenvironments.ItcanfitintoanyexistingITinfrastructure,makingdeploymentcomparatively easyandlowcost.PlatformindependencealsoenablesVertexOSeriestoadapttochangingIT infrastructurewithoutconstrainingplatformchoices.Businessesarefreetoinvestinanyhardware, databases,andsoftwarerequiredtorundaytodayoperations,aswellastointegrateITinfrastructure fromacquiredorganizations.
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ByusingobjectorientedtechniquesandWebtechnologies,VertexOSeriesefficientlycombines functionalityfordatamaintenance,taxcalculation,systemadministrationandexternalinterfacetoa financialhostsystemthatcanbesharedbymultipleapplications.
COMPREHENSIVECONTENTSUPPORTEDBYVERTEXRESEARCHPROFESSIONALS
Leveragingtheskillsandexperienceofover50taxresearchprofessionals,Vertexhasincorporated directlywithinVertexOSeriesadatasetoftaxratesandrulescompiledfromcomprehensivetaxability research. Thisdatasetcontainscoverageforapproximately10,220U.S.taxingjurisdictionsincludinglocalcounty, city,anddistrictjurisdictions,andfornearly240countries.Collectionofthisdatainvolveswellmanaged processeswhicharereviewedbythirdpartyauditorsaspartofaperiodicauditprogramperformedin accordancewithStatementonAuditingStandards(SAS)No.70. RoutinelyUpdated VertexcontinuouslymaintainsthisdatasetandprovidesVertexOSeriesusersadownloadableupdate filewiththeeffectivedatesforeachchange.Theupdatefileismadeavailableonaregularmonthly schedule,andcontainsonlythechangessincethelastupdate.Sinceallratesandrulesaredrivenby effectivedates,thehistoryofthisdataisalwaysavailable.Updatescanbeappliedtothesystembya nontechnicalindividualusingabuiltinupdateutilitysonoITassistanceisrequired,allowingforquick responsetothepostingoftheseupdates.Itsasimple,onestepprocessthatkeepsyourtaxcalculations compliantwitheventhemostrecentchangesimposedbycountry,state,provincialandlocaltaxing authorities.Asaresult,maintainingmaximumtaxcompliancewithVertexOSeriesisefficientand deliversextremelyhighvaluetoyourtaxdepartment. StandardRatesandRulesandSpecialTransactions Ordinarily,stayingcurrentwiththeconstantchangesineachjurisdictionstaxlegislationwouldbean overwhelmingandexpensivetaskforanytaxdepartment.But,asdescribedabove,thecomprehensive setoftaxdataincludedwiththesystemunburdensyourtaxprofessionalsfromlaborious,time consumingresearch,freeingthemtoperformmoreproductivetasks.Includedinthiscomprehensive datasetare: Standardratesforgoodsandservicesinover9,000U.S.andnonU.S.jurisdictions,including country,state/province,county,city,anddistrictjurisdictions SitusorPlaceofSupplyrules Taxabilitybasedonwhattheproductisorhowitisusedwithanassociatedtaxresultofexempt, nontaxable,ornonstandard(reduced)ratefortaxabilitycategories IntraEuropeanUnion(EU)transactionsincludingtriangularsupplies Reversecharges(selfassessmentofVAT) Tieredtaxstructures
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Maximumtaxwheremaximumsaresetforthetaxamountorthebasisamount Percentagebasisruleswhenareductioninthebasisisappliedasapercentage Specificrulesregardingtheprecisionwithwhichroundingiscalculated Discounts Jurisdictionoverriderules Salestaxholidays
REQUIREMENTSFORINITIALSETUPOFVERTEXOSERIES
InordertoproperlyimplementVertexOSeriesyouwillneedtoidentify,ordefinecertainattributesof yourbusinessandproductline,suchas: Taxpayerstructureorhierarchy Locationswhereyouareregisteredtocollecttaxforeachofyourcompanysfilingentities Storelocations Assignmentofallproductstotaxabilitycategories Customerexemptions Taxpayerstructurecanhaveuptothreelevelscompany,division,anddepartment.Thisstructurecan beusefulinreportingortoisolatethetaxabilitysetuptoaparticularpartofyourorganization. Registrationsfortaxpayerscanbeatthestatelevelandincludealllocals,oryoucanspecifylocal jurisdictionswithinaparticularstate.Storelocationswhicharedefinedaspartofafilingentitycanbe addedthroughanimportfeature.Whilethesestorelocationsareimportantforfilingreturnsinsome jurisdictions,theyarealsorequiredsotheappropriatetaxingjurisdictionscanbeidentifiedforinstore sales.
PRODUCTGROUPINGCODES
ProductgroupsorclassesareassignedtotheVertextaxabilitycategoriestoapplytheappropriaterule (Figure2).ThesearenotVertexcodes,butthecodesthateitheralreadyexistinyourinventoryorPOS system.
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Figure2TaxabilityCategories
Mostproductsaresimplytaxableatthestandardrate.Inordertosimplifythesetupeffort,Vertex requiresonlythatyouidentifyproducts,productgroups,orservicesthatwillhavespecialtaxabilityor rates.Thedefaultbehaviorofthesystemistotaxatthestandardrateandassumesitemstobetangible personalproperty.AcarefulreviewoftheitemcategoriesinVertexOSeriesshouldprovidethebasisfor yourdecisiononmappingproductstoVertexitemcategories.WhilethecategorylistinVertexOSeries isfairlycomprehensive,youmayfinditadvantageoustodefineyourowntaxabilityruleforaparticular jurisdiction,whichthesystemallowsyoutoeasilyaccomplish.
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VertexRetailSolutions WHENPRODUCTGROUPINGCODESARENOTSENSITIZEDFORTAX
LetssaythatyourinventoryorPOSsystemdoesnotpermittheassignmentofaproductgroupthat wouldbeusefulfortaxability.Perhapsthatfieldisreservedforstoreaisleorstoredepartment.Tax Assistrulebuilderwillletyoucreateanewidentifier(Figure3).WithTaxAssist,anyinputdataelement onthetransactioncanbeusedinalogicalIF/THENruletosetresultsthatareusedbythecalculation whendeterminingtaxability.
Figure3TaxAssistRuleBuilder
IfyoucangroupSKUsintoataxabilitygroup,thatgroupcanbedefinedinaTaxAssistrule.Thatnew groupcodecanthenbelinkedtoataxabilitycategory.ItwouldnotbenecessarytoassigneachSKU,but onlythetaxabilitygroupcode.Foreachtransaction,thatcodewillbedeterminedfromthegroupcode withalookupagainsttheTaxAssistrules.Thenitisusedtofindtheappropriatetaxabilitycategoryand applythecorrecttaxrule.
SALESTAXCALCULATIONTHEPROCESS
Duringtransactionprocessing,theVertexOSeriescalculationengineapplieslogictodeterminethe mostaccurate,current,andcomplianttaxtreatmentforthegivensetofinputssuppliedfromthe financialsystem.DescribedbelowistheprocessVertexOSeriestypicallyappliesinthecalculationof salestax.
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Startingwiththefollowinginformationforeachtransaction: TheDispatcherAddressinformationorthePhysicalOriginofthetransaction TheSellerAddressinformation,alsoreferredtoastheAdministrativeOrigin TheCustomerAddressinformationorDestination AndtheBenefitReceivedAddress,alsocalledtheAdministrativeDestination VertexOSerieswillthen: AccuratelydeterminetheSitusandidentifyalloftheappropriatetaxingjurisdictions Next,usingthetaxrulethatisbasedontheproductorproductgroupcodeinvolvedinthetransaction, VertexOSerieswilldetermineifoneormoreofthefollowingshouldbeapplied: Exemptionsfromtax SpecialRates Taxholidayexemptionsfromtax Usingthemonetaryamountofthetransaction,VertexOSerieswillthen: Adjustthebasisasdefinedinthejurisdictionforcouponsanddiscounts Calculateanaccuratesalesandsellersusetaxamountforeachjurisdictionusinganyapplicable threshold,tier,ormaximumtaxrules Applytheappropriateroundingrulesorbracketscheduleswhenrequired Applyanyothertaximpositionsorenvironmentalfees,whitegoodsfees,etc. VertexOSeriesnextdeterminesifanyofthefollowingtransactionitemsneedtobeapplied: Refunds Deliverycharges Rentalcharges Restockingfee Nonmerchandisefees SaleofWarranties Component/Packagedissues DeliveryMethodTaxability Multipleshiptolocations Dropshipments ServiceCharges Afterperformingalloftheapplicablestepsdescribedabove,VertexOSeriescalculatesandreturnsthe finaltaxresultsinanXMLresponsemessage.Thisdataexchangebetweenthefinancialsystemand VertexOSeriescanbescheduledbytheuserorexecutedcontinuouslyinrealtime.
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VertexRetailSolutions CUSTOMEREXEMPTIONS
Exemptioncertificatesneedtobeobtained(orcreated),andstoredforeachcustomerwhoqualifiesfor anexemptionofsalestax.Vertexrecommendsthatinthesecasesyouincludeexemptioncertificate informationforspecificcustomers.ThisiseasilyaccomplishedusingExemptionCertificateManager (ECM)whichisembeddedwithineveryVertexOSeries.ECMwillacceptcontactinformationonthe exemptcustomerandexpirationdateofthecertificate,andpermityoutolimittheexemptiontocertain productsandproductgroups(Figure4).Theexemptionwillonlyapplytotransactionsmeetingthe criteriathathavebeensetupforthatcustomer.Or,ifyouprefer,customersorclassesofcustomerscan receivespecifictaxabilityorratesbydefiningacustomrule.
Figure4ManagingExemptionCertificates
ECMincludesalibraryofjurisdictionforms,batchletterprocessingforsendingcertificaterelated notifications,andcertificatenoncomplianceandauditreporting.Withtheessentialinformationabout thecertificatesallinoneplace,compliancecanbemonitoredmoreefficiently.ECMalsoenablesyouto giveauditorsdirectaccesstoselectcertificatedata,eliminatingthetimeconsumingandlaborintensive processofmanuallymanagingpapercertificates.

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VertexRetailSolutions VERTEXADDRESSCLEANSING
FortransactionsintheUnitedStates,Vertexrecommendstheuseofninedigit(ZIP+4)codesfor greatestaccuracyindeterminingtaxingjurisdictions.IfZIP+4codesarenotincludedinyourhostsystem data,TaxGIS,whichidentifiestaxingjurisdictionsusingGeographicInformationSystem(GIS)processing tools,canassignthemusingtheVertexAddressCleansingsolution. VertexAddressCleansingensuresdataqualityandenhancestheaccuracyoftaxjurisdictionassignment forlocationsintheUnitedStatesbyevaluatingU.S.addressesandreturningvalidatedinformation whichincludesfullZIP+4postalcodes VertexAddressCleansingcanbeusedinconjunctionwithTaxGIS.AGISanalyzesaspecificlocationusing multipleoverlappinglayersofgeographicalinformation.Ataxarearepresentsauniquesetof jurisdictions,whileaTaxAreaIDisanidentifierthatenablesyoutoaccessspecifictaxareainformation thatresidesintheTaxGISdatabase. VertexhaspartneredwithBusinessObjects,anSAPcompany,todeliveranintegratedaddresscleansing solutionforU.S.addressdata.VertexAddressCleansingincludesthefollowingfunctionality: AssignsninedigitZIP+4codestoaddressesprovidedwithonlyfivedigitZIPcodes Usesalladdresscomponents,includingstreetaddress,fordeterminationofaccurateZIP+4code Correctsalladdresscomponentsincludingstreetaddress LookupsaresupportedbyUnitedStatesPostalService(USPS)CodingAccuracySupportSystem (CASS)certifieddatabase UpdatedmonthlytoincludethelatestchangesintheUSPSdatabase ForuserswithaNorthAmericanregionallicense,VertexAddressCleansingcanbelicensedasanaddon featureofVertexOSeriesandVertexRetail.
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VERTEXINDIRECTTAXFORRETAIL
OVERVIEW
VertexIndirectTaxforRetail(VertexRetail)isanextensionofVertexOSeriesthatprovidesanendto endsolutiontomanagetaxattheenterpriselevel.VertexRetailcombinesindustryleadingtaxresearch andtechnology,plusaknowledgeableteamofimplementationsupportconsultantstoprovideyourtax departmentwiththetoolsnecessarytodeliveraccurateandconsistenttaxcalculationforevery transaction. VertexRetailisdesignedtoovercomemanyofthespecialtaxchallengescommonlyfacedbyretailers: Thehighvolumeofretailtransactionsthatamplifyauditsandpenaltieswhichinturnrequire largeamountsofcashbekeptinreserveasacontingencyfund Transactionalcomplexitiesresultingfromdeliveries,installations,sendsales,Internetand mobiledevicepurchasesandreturns Businesstobusinesstaxabilityandbusinesstoconsumertaxabilityateverystorelocation Salestaxsourcingcomplexitiesinvolvingproductsthatcanbesourcedfromtheretaillocation, fromawarehouse,orofferedtoconsumersandbusinessesfromaWebsite Thedifficultiesofcomplyingwithnewjurisdictionsandnewtaxratesandrulesforadditional newstores Additionalnexusfromcompanyacquisitionsthatimmediatelyimpacttheliabilityofthe companyscorebusiness Exposuretoclassactionlawsuitsfrominaccuratetaxcalculationsthatcanleadtocostly settlements,customerdissatisfactionandnegativepublicity Thecomplexitiesassociatedwithtaxholidays ThelaboriousadministrationofthousandsofexemptioncertificatestomanageWhoandUse exceptions VertexRetailwillreduceyourcompanysexposuretoauditswhilesavingtimeandmoneythroughthe eliminationoferrorpronemanualtasks.VertexRetailalsoensuresthatsalesandusetaxisapplied accuratelyandconsistentlyacrossallsaleschannelsincluding: Storepointofsalelocations Ecommercesales Storekiosks Catalogsales Callcentersales Mobiledevicetransactions Handhelddevices
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AsingleinstallationofVertexRetailwilldeliverallofthefollowingfromonecentrallocation: Continuousupdatesoftaxrulesandratesthatreflectthemostrecentchangesinstateand locallaw Accurateidentificationofalljurisdictionsauthorizedtoapplytaxforeachtransaction Theapplicationofspecialcalculationandroundingrulesincludingbracketschedules Assistancetomeetreturnsfilingdeadlinesforalljurisdictionstowhichyourcompanyis requiredtoremittaxes Scalabilitythatwillmaintaincompliancewhenanacquisitiondramaticallyincreasesthenumber ofstores CentralizationoftaxresultsandactivitylogstopermitprocessanalysisforSarbanesOxley compliance Enhancementofyourabilitytoeffectivelysupportauditsbyenablingyoutogenerateconcise andaccuratereportsondemandwithoutITinvolvement Taxprocessingsupportforglobalexpansion VertexRetailalsodeliverssignificantbenefitstotheITdepartmentaswell.Duetoascalable,Web based,serviceorientedarchitecture,VertexRetailprovidesyouwiththeflexibilitytoworkwithany POS,Ecommerceorbackofficesystemofferingseamlessintegrationwithallretailsystems,newor legacy. AnotherreasonVertexRetailiscapableofachievingtaxcomplianceinsuchacomplicatedenvironment isthecapabilitytoconnectwithalloperationsthatsupportsales,including: Backoffice Storelevel Procurement Inventorymovement Assettransfer Sincemostretailoperatingenvironmentsarefragmentedinfrastructurescomposedofmultiple, disparatevendorsystems,theintegrationflexibilityofVertexRetailprovidestheITdepartmenta quickerandeasierimplementationaswellaslessongoingmaintenance.
TRANSACTIONSUNIQUETORETAILERS
VertexRetailalsoensuresthatsalesandusetaxisappliedaccuratelyandconsistentlyacrossalltypes andvariationsofsalestransactionsretailersoftenencounter,including: Deliveries Services,suchasinstallations,whicharerenderedatacustomershomeaddress Instorepurchasesshippedtoanotherdestination(sendsales)
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Storereturnsfromanotherjurisdiction Salesofnoncoreproducttypesthathavediversetaxability(storewithinastore) Internetpurchasesreturnedinstore Mobilepurchasesforinstorepickup And,becauseofVertexscomprehensivetaxresearch,youwillalsobecompliantwithtaxholidays, tieredtaxes,thresholdandcompoundtaxes,taxesleviedbyoriginandmodifiedoriginstates,bracket taxes,andmore.
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VERTEXRETAILDEPLOYMENTMODELS
RETAILTAXEXTRACT(RTE)DEPLOYMENT
Thisdeploymentmodelforretailexhibitsagreatdealofflexibilitydependinguponthecapabilitiesand parametersofthecustomersPOSsystem.RTEreliesonacompanysnativePOStaxcalculationssoit doesnotrequireaVertexOSeriesinstancedeployedateachstorelocation,onlytheoneatcentral headquarters. ThescalabilityoftheRTEdeploymentisvirtuallyunlimitedprovidedthereareanadequatenumberof serversimplemented.Mostofthecomponentsrequiredtoimplementthisdeploymentarereadily availableinmostcompanyinfrastructures. AnoverviewoftheRetailTaxExtract(RTE)processisillustratedinFigure5below. RetailTaxExtractProcess TheRTEProcessbeginswhendataisextractedfromoneorbothofthefollowingVertexOSeries databases: TheTaxProcessingSystem(TPS)Databasewhichcontainsrecordspertainingtothetaxrateand ruledatasuppliedbyVertexandalsodatadefinedbyyou TheTaxGeographicalIdentificationSystem(TaxGIS)Databasewhichcontainsrecordsforover 80,000jurisdictionsthatcanlevytax Dependinguponthetypeoftransactiontakingplaceatthestorelevel,therearetwooptionalextracts thatcantakeplace: Bybusinesslocationforinstoresalesthesystemusesthetaxpayerbusinesslocationfor determiningapplicabletaxrulesforajurisdictionandextractsdatafromtheTPSdatabaseonly Byregistrationlocationforsendsalesthesystemusestaxpayerregistrationlocationsfor determiningapplicabletaxrulesforajurisdictionoutsidethebusinesslocation,whichrequires taxdatatobeextractedfromboththeTPSandtheTaxGISdatabases OncethedatahasbeenassembledfromtheTPSand/ortheTaxGISdatabases,VertexOSeriesrunsa seriesofsalestaxtransactionsforeachcombinationofDate,Location(businessand/orregistered)and ProductClassestodetermineandidentifychangesintaxabilityresults.VertexOSeriesutilizesProduct Groupswhicharelogicalcategoriesorclassesofproductswithsimilartaxabilityrules.Theuseof ProductGroupseliminatesissuesencounteredwhentherearethousandsoreventensofthousandsof individualproductofferings(SKUs).Outputfromthesesalestaxtransactionsarethenwrittento databasetables(RTEStagingTables). RetailTaxCalculationProcess Fromthesedatabasetables,thereareseveraloptionsavailabletoextractandloaddatafromthe stagingtablestothestore(POS)levels.TheselectedoptionispartiallydeterminedbythetypeofPOS systemsinstalledatthestorelevel.
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VertexConsultantshaveextensiveexperienceinidentifyingwhichofthefollowingoptionswoulddeliver optimumperformanceforyourinfrastructure: Useofanextracttransformload(ETL)programtopulldatafromthetablesforuseatthestore (POS)levelsthisprocesswillreplacethecurrentnativemethodologyusedtofeedtaxdatato thePOS,butitdoesnotalterorreplacethecurrentPOStaxcalculationlogic ThesystemcanbeconfiguredtogenerateanXMLdatafilefromthestagingtablesthisoption maybethemostapplicableforcustomerswithPOSsystemscapableofreadingXMLdatafiles ThesystemutilizesanalgorithmtobuildataxbracketschedulethisoptionisapplicabletoPOS systemsthatcanonlyhandleabracketoraschedulestructureforlookinguptaxamounts VertexConsultingcanalsoprovideyouwiththeservicesrequiredtoimplementandsupportyourretail solution. OncethedataisloadedintothePOSTaxDataInterfaceTables,eachPOShasaccesstothedata necessarytoaccuratelycalculatesalestaxforeachtransaction. RetailConsolidationProcess ThecalculationresultsfromeachPOSinstancearerecordedandtemporarilystoredinthePOSsystem TransactionLogfiles(TLogs).Next,allcalculationsfromallPOSinstancesareconsolidatedintoonefile andtransferredtothePOSLogTables.
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Figure5RetailTaxExtractDeployment
TheBatchClientInterfaceProcess Tosupportcentralreportingoftaxcalculations,taxresultscreatedfromthenativePOSsysteminthe formofPOSTlogfiles,whichareconsolidatedasdescribedabove,needtobeuploadedtothecentral VertexOSeriesinstancelocatedatcentralheadquarters(Figure5above).Thisisaccomplishedusing distributetaxtransactionstomakesurethedataisinaformatacceptabletoVertexOSerieswith properjurisdictionbreakout.Thisalsoyieldsdatathatissuitablefortaxreportingandbusiness intelligencereportingpurposes.TransactiondatatemporarilystoredinthePOSLogTablescanbe uploadedtothefullinstanceofVertexOSeriesatcentralheadquartersveryefficientlywiththeBatch ClientInterface.VertexConsultingcanbeengagedtosupportyourintegrationprocess. TheBatchClientInterface(BCI)comesstandardwithVertexOSeriesandisrecommendedbyVertex. Alternativelyhowever,userscancreatetheirownJavaAPI.AlthoughuseoftheBCIissimplerthan developingaJavaorWebserviceinterface,itwillstillbenecessarytocreateflatfilesordatabasetables forBCIinput.
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SuccessfuluseoftheBatchClientInterfaceutilityrequires: AbasicknowledgeofcreatingandmaintainingExcelspreadsheets RunningscriptsthroughthecommandlineinbothWindowsandUNIX SQLscripting
LOCALINDIRECTTAXENGINE(LITE)DEPLOYMENT
ThisdeploymentmodelforretailconsistsofafullVertexOSeriesinstanceresidingonaserveratcentral headquarters,andadeploymentoftheVertexOSeriescalculationengineresidingonserversateach POSlocation.ThesestoreleveldeploymentsarelightweightversionsofVertexOSeriesandincludejust thenumberoffilesneededtosuccessfullycalculatetax.Ultimately,taxresultsareaccumulatedatthe storelevelPOSlocationserverandareuploadedbacktocentralheadquartersforconsumptionbythe fullinstanceofVertexOSeriesforreconciliationorremittance. RefertoFigure6belowtofollowtheflowofdataintheLITEDeployment. ThefirststepinthisdeploymentmodelisthecreationoftheTaxEngineExtractfileusingautility providedbyVertex.Theprimarypurposeofthisutilitywhichislocatedatcentralheadquartersisto extractfromVertexOSeriesallthedatarequiredtoaccuratelycalculatetaxateachindividuallocation andefficientlymovethedatatoeachlocation.Thisfileshouldberecreatedwheneverthereare changesintheTaxData,orwhenVertexprovidesthemonthlydataupdate.Itisrecommendedthatyou usethesamenamefortheTaxEngineExtractfilesothatthelatestversionwillsimplyoverwritethe outdatedversion. TherearetwodataextractionoptionsavailablewiththeTaxEngineExtractutility: AllStores ThisoptionproducesasingleExtractTransformLoad(ETL)zipfilethatcontainsthejurisdictional datarelatedonlytotheTaxAreaIDsassociatedwitheachstorelocation. NationalData AsingleETLzipfileisextractedthatincludesallZIPCodelocationsthroughoutthecontinentalUS andCanada.ThissinglefileisthendistributedtoallindividualPOSlocations.BecauseallPOS locationswillnowhavealljurisdictionaldatanotjustthedatarelatedtothestoresTaxAreaIDs thisoptionwillsupportssendsalesandtherecalculationofmerchandisereturnsonthelocalserver. AftertheETLzipfileiscreated,itisnecessarytotransferthefilefromcentralheadquarterstoindividual store(POS)locations.Thisiseasilyaccomplishedusinganyreadilyavailablethirdpartydatadistribution servicecapableofplacingthefilesonadesignateddirectoryonthededicatedPOSlocationserver.This datadistributionservicemustresideonallserversandtheETLfilesmustremaininzipformat.
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Astaxtransactionsareprocessedattheindividualstorelocations,theLITEwritesthecalculationresults toaTaxJournalzipfile.Whenthiszipfilereachesaspecifiedsize,oratpredeterminedtimeintervals, thecurrentTaxJournalFilezipfileisclosedandanewoneisopened.Athirdpartydatadistribution serviceisthenrequiredtodelivertheTaxJournalzipfilestocentralheadquarters. Locatedatcentralheadquarters,theTaxJournalImportService,whichrunswiththeVertexCentralWeb application,loadstheTaxJournalZipfilesintotheReportingDatabaseofthefullVertexOSeries deploymentatheadquarters.
Figure6LocalIndirectTaxEngineDeployment
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REPORTINGANDCOMPLIANCE
REPORTING
StandardReports VertexOSeriescontainsaStandardReportsfunctionthatcanquicklyandeasilygeneratereportsbased ondataintheTaxJournalandReportingdatabases.StandardReportshaveaselectablesetoffilter criteriaandafixedoutputlayoutavailableinportabledocumentformat(PDF). Thesereportsenableyouto: Listthetotaltaxcollectedinaparticularjurisdictioninaparticularyear Displaytotalsales,taxablesales,nontaxablesales,andexemptsalesbycountry,state,orlocal jurisdictionsforaparticulartimeperiod Schedulereporttimeandfrequency StandardReportsareusefulforauditpreparation,auditsupport,generalledgerreconciliation,returns preparation,anddaytodaymanagementoftransactiontaxes. ThesevenStandardReportsavailablewithVertexOSeriesforRetailaredescribedinAppendixA. DataExtract DataExtractisatoolforcreatingcustomreportsfromTransactionalorTaxabilityManagerdata.Data Extractallowsanontechnicalusertobeabletoquicklyandeasilyaccessthedataneededfor compliancepurposeswithoutinvolvingIT.ThispowerfultoolgivesOSeriesuserstheabilitytodefine columnsandexportdatatoadelimitedfile,XMLfile,PDF,RTF,oranHTMLfilewhichcanthenbe importedintoyourchoiceofexternalapplications.DataExtractenablesyouto: CreatecustomextractdefinitionsfordatabasedonVertexsuppliedDataExtracttemplates Definegroupingorsortcriteriaforthereportorexport ViewSampleExtractsorcopythemtocreateyourownreports Selecteitherasimpletabularreportformatoradelimitedexportformat,usingthedelimitedcharacters available: Defineafunctionforthefieldyouareselectingsuchasaverage,count,ormax.andthelistof functionswillchangedependingonthefieldyouselected DefineoperatorssuchasEquals,DoesNotEqual,andLessThantohelpnarrowthedata Build"AND"or"OR"statementsinSQLwithouthavingtoknowtheexactSQLformat Saveyourfilters
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SampleExtractsaretwelveVertexsuppliedreportsthatyoucancopyandusetocreateyourown reportsasillustratedinFigure7below.
Figure7DataExtractSampleReports
VERTEXREPORTINGANDANALYSIS
ReportingandAnalysisisapowerfulreportingtoolintegratedwithVertexOSeriesthatenablesyouto analyzetrends,spotirregularities,andturntaxdataintoinvaluableinformationfortaxsavingsstrategy. ItisaWebbasedreportingandanalyticsapplicationdevelopedwithmarketleadingBusiness IntelligencetechnologyfromIBMCognos. ReportingandAnalysisoffersadditionalflexibilityoverthestandardreportsprovidedwithinVertexO Series,enablingyoutomeetyourtaxreportingneedsbycreatingcustomtables,pivots,charts,and reportsthatcontaintheinformationyouneed,intheformatyourequire.
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VertexRetailSolutions VERTEXSALES&USETAXRETURNS
AutomatingcomplianceiseasilyachievedwiththeadditionofVertexSales&UseTaxReturns(Vertex Returns)toyourVertexRetailimplementation.VertexReturnsisaWindowsbasedPCapplicationthat producessignaturereadysalesandusetaxreturnsfortaxingjurisdictionsintheUnitedStates,Canada, andPuertoRico.Toproducethereturns,thesystemusesjurisdictionsummarytaxdataorcombined totalsimportedfromVertexRetail. VertexReturnscalculates,formats,andprintstheformsyouneedtofile,includingsalesandusetax returns,schedules,worksheets,paymentrequests,andconsolidatedtaxreturnsforbothstateandlocal jurisdictions.Inaddition,Webfilingisalsoavailableforaselectnumberofstates.
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VERTEXINDIRECTTAXOSERIESANENDTOENDENTERPRISETAX SOLUTION
VertexOSeriesisanenterprisetaxprocessingsolutionthatmanagestaxonbothsalesandprocurement transactions.Itiscompletelyscalabletosupportgrowthandexpansion;anditdeliverscompliancefor companiesoperatingintheglobalmarketplace.And,withtheadditionofVertexSales&UseTax Returns,VertexOSerieswillprovideyourcompanywithallthebenefitsofatrue,endtoendindirect taxprocessingsolution,including: Precisedeterminationoftaxabilityandjurisdictions Maintenanceofanaccuraterateandruledatabase Calculationofcomplextransactions Completeautomatedmanagementofexemptioncertificates Automaticproductionofsignaturereadysalesandusetaxreturns Advanceddatamanagementtools,customreportingcapabilitiesandexemptioncertificate management Greatervisibilityintoyourtaxprocessestoaidauditpreparationandsupportstrategicfinancial decisionmaking Centralizedmaintenanceandmanagementofalltaxcomplianceactivitiesfromasingleinstance
CAPABILITYTOSTARTANYWHEREFORCENTRALIZEDTAXAUTOMATION
VertexOSeriesisanintelligenttaxcalculationenginethatautomaticallyknowswhichtypeoftaxto calculateandhowtocalculateitbasedonthemessages(ordata)passedintoitfromvariousERP, POS,andfinancialsystems.SincethesamecentralinstanceofVertexOSeriescanmanagesalestax,the accrualofusetax,andtheverificationoftaxonvendorinvoices,withnoadditionalinstallationyoucan builduponyourVertexOSeriesforRetailinstancetoprocessallindirecttaxessimplybylicensing additionaldatabases.Or,ifyourcompanyalreadyisprocessingsales,use,orvalueaddedtaxeswith VertexOSeries,youcansimplybuilduponthatimplementationtoprocessallretailtaxes. Thisispossible,becauseVertexOSeries: Isbuiltonascalable,webbased,serviceorientedarchitecture Isflexibleandenablesseamlessintegrationwithallofyourmultichanneloperationalsystems (suchasstore,backoffice,andecommercesystems),bothlegacyandnew Providesasingle,datadrivencalculationenginethatsupportsrealtimetransactions Determinestaxabilitybasedonacomprehensivetaxdatamodelthatcoversallpossiblesales, consumeruse,andVATtaxpermutations Inessence,youcansimplystartanywherewithinyourtaxprocessingarenawithaVertexOSeries instanceandbuildoutuntilallindirecttaxesarebeingprocessedwithoneplatformandonetax calculationengine.
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ThisallowsyourITdepartmenttoeliminatemultiple,siloedapplicationsandunifyenterprisedata.The resultisasubstantialreductioninthetotalcostofownership(TCO)fortaxtechnology,sinceITwillhave fewersystemstomanageandkeepcurrent.
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HARDWAREANDSOFTWAREREQUIREMENTS
USERINTERFACE
AccessingVertexOSeriescanbeaccomplishedthroughanycomputerthatsupportsanyoneofthe majorInternetbrowsersincludingMicrosoftInternetExplorer7.0or8.0,AppleSafari4orMozilla Firefox3.5or3.6.ThesupportedInternetbrowserpluginsincludeAdobeFlash9or10;and,toreview reports,thecomputerwillrequireAdobeReader8.2.1.orlater.
DATABASESERVER
VertexOSeriesoperateswiththefollowingdatabases: IBMDB2UDB,versions9.1,9.5or9.7forWindows;UNIXorLinux;MicrosoftSQLServer2005or2008; andOracleDatabase10gRelease2or11g(withminimumpatchlevel11.1.0.7.0). Alldatabaseservershavethesameminimumcriteria(requirementsarebasedonprocessing20 transactionspersecondusinganembeddedcalculationenginewithasingledatabaseserver): Item MinimumRequirement CPU Memory Two(2)@2.8GHzProcessors 2,048MB
Networkconnection 100BaseTorequivalent Theamountofdiskspacerequiredforallthreeserverswillvarydependinguponyourtransaction volumeanddataretentionrequirements.
APPLICATIONSERVERANDJAVAAPI
AlistofthespecificsoftwarerequirementsfortheApplicationServerandtheJavaAPIcanbeviewedin AppendixB.
SUPPORTOFVIRTUALIZATIONENVIRONMENTS
WhileitisnotfeasibleforVertextotesttheVertexOSeriesproductineachofthenumerous virtualizationtechnologies,Vertexfullysupportsvirtualizationtechnologiesandwillmakeeveryeffortto reproduceandresolveanyissuesacustomermayencounterintheirspecificnativeenvironment.
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ABOUTVERTEXINC.
Withmorethan30yearsofexperience,VertexInc.istheleadingproviderofenterprisecorporatetax solutionsandprocessmanagementservicesworldwide. Vertexsolutionshelpcompaniesstreamlineandintegratetaxprovisionandcomplianceprocesses,and leverageinformationtodiscovernewstrategictaxsavingsacrosseverymajorlineofbusinesstax, includingincome,sales,consumeruse,valueadded,communications,andpayroll.Toserveits customers,VertexworksinpartnershipwiththeworldsleadingprovidersofERPsoftwareandrelated services. Foundedin1978,Vertexisaprivatelyheldcompanythatemploysmorethan600professionalsatits headquartersintheU.S.(Berwyn,PA)anditsofficesinEurope(London),Brazil(SoPaulo),Atlanta, Chicago,Dallas,Phoenix,SanFrancisco,SarasotaandWashingtonDC. FormoreinformationaboutVertex,visitourWebsiteatwww.vertexinc.com.
ABOUTVERTEXCONSULTINGSERVICES
VertexConsultingisanexperiencedstaffofdedicatedtaxtechnologists,researchers,andproject managementprofessionals.Over500clientsinallmajorindustriesacrossbothNorthAmericaand Europehaveincreasedthevaluetheirtaxdepartmentsaddtotheirorganizationsbypartneringwith VertexConsultingtoimplementtaxandtaxtechnologybestpractices. SinceVertexdoesnotprovideexternalauditing,therearenoSarbanesOxleyrestrictionsorconflictsof interestontaxconsultationwithclients.ThisallowsVertexConsultingtocombinerecognizedindustry expertiseinbothtaxandtechnologytoprovideclientswithasinglepointofcontactfortheirtax technologyneeds.
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APPENDIXA:STANDARDREPORTS
ThesevenStandardReportsavailablewithVertexOSeriesare: InvoiceTaxDetailReportTheInvoiceTaxDetailReportlistseachlineitemofaninvoice, groupedbyjurisdictionandbasedonthereportcriteria.Usethisfortaxaudits.Dependingon theBusinessEventyouselect,InvoiceTaxDetailwillonlyreportonsuppliesorprocurement transactions.UseameaningfulnamesothatyoucaneasilyidentifythereportbyBusiness Event. ReturnsExportStateReportTheReturnsStateReportenablesyoutogatherandexporttax datatocompleteUnitedStatesandCanadiantaxreturns.Itsortstheinformationbyexport state. ReturnsExportLocationReportTheReturnsExportLocationReportenablesyoutogatherand exporttaxdatatocompleteUnitedStatesandCanadiantaxreturns.Itsortstheinformationby exportlocation. ReturnsExportTaxTypeReportTheReturnsExportTaxTypeReportenablesyoutogather andexporttaxdatatocompleteUnitedStatesandCanadiantaxreturns.Itsortsthe informationbyexporttaxtype. TaxabilityCategoryReportTheTaxabilityCategoryReportlistsVertexprovidedoruser definedtaxabilitycategories.Thisreportincludescategorydescriptions,paths,codes,and effectivedates. TransactionRecapReportTheTransactionRecapReportsummarizesjurisdictiontotalsatthe highestjurisdictionlevel.WithintheUnitedStates,thestateisthehighestleveltodisplay jurisdictiontotals.Fortherestoftheworld,thecountryisthehighestleveltodisplay jurisdictiontotals.Usethisreportforaquickoverviewofyourtaxliabilityforaspecificperiod. TransactionSummaryReportTheTransactionSummaryReportlistsasynopsisoftax informationatthecountry,state,province,county,city,anddistrictlevelsforeachjurisdiction. Usethisforremittancepreparation.
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APPENDIXB:SOFTWAREREQUIREMENTSFORTHEAPPLICATION SERVERANDTHEJAVAAPI
WEBSERVICE
VertexOSeriesoperateswiththefollowingsoftware: Item OperatingSystem Requirement Thefollowingoperatingsystemsaresupported: HPUX11i(Itanium) HPUXPARISC11 IBMAIX5.3or6.1 IBMi5/OS(OS/400)V5R4orV6R1M0 SUSELinux10.x,(2.6kernel) RedHatLinux4(2.6.9kernel),or5(2.6.18kernel) SunSolaris9or10 WindowsXP,Windows2003Server,Windows2008 Server,WindowsVista,orWindows7 RedHatLinux4and5areredistributedaspartoftheOracleUnbreakable Linuxprogram TheItaniumplatformisnotsupportedforMicrosoftoperatingsystems Thefollowingapplicationserversaresupported: ApacheTomcat6.0 OracleWebLogic10.3,11 JBossApplicationServer5.1 OracleApplicationServerOC4J10.1.3 SAPNetWeaver7.1ServicePack3orhigher IBMWebsphere6.1,withIBMJavaVirtualMachine(JVM)SR3 JavaRuntimeEnvironment5.0Update8orlater JavaRuntimeEnvironment6.0Update4orlater
ServletContainer
JavaSoftware
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Item JDBCDriver
Requirement AType4JDBCdriverappropriateforyourdatabase. VertexsuppliesthefollowingdriverswithOSeries: MicrosoftSQLServer:jTDSJDBCDriver Oracle:OracleJDBCDriver UniversalDriver ThefollowingversionsoftheAdobeFlashPlayeraresupported: AdobeFlashPlayerversion9 AdobeFlashPlayerversion10 MicrosoftInternetExplorer7and8,MozillaFirefox3,AppleSafari4
FlashPlayer
WebBrowsers
JAVAAPI
TheVertexOSeriesJavaAPIoperateswiththefollowingsoftware: Item OperatingSystem Requirement Thefollowingoperatingsystemsaresupported: HPUX11i(Itanium) HPUXPARISC11 SUSELinux10.x,(2.6kernel) IBMAIX5.3or6.1 IBMi5/OS(OS/400)V5R4orV6R1M0 WindowsXP,Windows2003Server,2008Server, orWindowsVista,Windows7 RedHatLinux4(2.6.9kernel)or5(2.6.18kernel) SunSolaris9or10 RedHatLinux4and5areredistributedaspartoftheOracleUnbreakable Linuxprogram. TheItaniumplatformisnotsupportedforMicrosoftoperatingsystems
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Item JavaSoftware
Requirement JavaRuntimeEnvironment5.0Update8orlater JavaRuntimeEnvironment6.0Update4orlater AType4JDBCdriverappropriateforyourdatabase. VertexsuppliesthefollowingdriverswithOSeries: MicrosoftSQLServer:jTDSJDBCDriver Oracle:OracleJDBCDriver DB2UDBforWindows,UNIX,orLinux:IBMDB2 UniversalDriver
JDBCDriver
APPLICATIONSERVERS
TheapplicationserverrunningVertexCentralmustmeetthefollowingminimumrequirements: Item CPU DiskSpaceRequired Memory MinimumRequirement 2GHzProcessor 5GB 512MB(witha32bitoperatingsystem) 768MB(witha64bitoperatingsystem) 100BaseTorequivalent
NetworkConnection
TheserequirementsapplyonlytotheVertexapplication.Requirementsofanythirdpartyproducts,suchasa relationaldatabaseserveroraJ2EEserver,arenotincluded.
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TheapplicationserverrunningVertexWebServicesmustmeetthefollowingminimumrequirements: Item CPU DiskSpaceRequired Memory MinimumRequirement 2GHzProcessor 5GB 768MB(witha32bitoperatingsystem) 1,280MB(witha64bitoperatingsystem) 100BaseTorequivalent
NetworkConnection
TheserequirementsapplyonlytotheVertexapplication.Requirementsofanythirdpartyproducts,suchasa relationaldatabaseserveroraJ2EEserver,arenotincluded. ItispossibletodeployVertexWebServicesandtheVertexDatabasesonthesamecomputer,buttheycompetefor systemresourcesanddiminishsystemperformance.VertexrecommendsthatyoudeployVertexWebServicesand VertexDatabasesondifferentcomputers.
IfyouchoosetorunbothVertexCentralandVertexWebServicesonasingleapplicationserver,the applicationservermustmeetthefollowingminimumrequirements: Item CPU DiskSpaceRequired Memory MinimumRequirement 2GHzProcessor 10GB 1,280MB(with32bitoperatingsystem) 2,048MB(witha64bitoperatingsystem) 100BaseTorequivalent
NetworkConnection Notes:
TheserequirementsapplyonlytotheVertexapplications.Requirementsofanythirdpartyproducts,suchasa relationaldatabaseserveroraJ2EEserver,arenotincluded. ItispossibletodeployVertexWebServicesandtheVertexdatabasesonthesamecomputer,buttheywill competeforsystemresourcesanddiminishsystemperformance.VertexrecommendsthatyoudeployVertex WebServicesandVertexdatabasesondifferentcomputers.
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GLOSSARY
AdministrativeDestination:AdministrativeDestinationisequivalenttotheBillTo:location.Acommon synonymisbenefitreceived.ForservicetransactionsintheU.S.andCanada,theadministrative destinationisthebenefitreceivedlocationandthedestinationistheserviceperformedlocation.For tangiblepersonalpropertytransactions,theadministrativedestinationisexaminedwhencheckingfor thetriangulationconditionofanintraEUtransactionfromthebuyer'sperspective. AdministrativeOrigin:AdministrativeOriginisequivalenttotheBillFrom:location.Common synonymsincludeordertaken,orderacceptance,placeofprincipalnegotiation,andplaceofbusiness. AssociationforRetailTechnologyStandards(ARTS):aretailerdrivenmembershiporganization dedicatedtocreatinganopenenvironmentwherebothretailersandtechnologyvendorsworktogether tocreateinternationalretailtechnologystandards.ARTSisaseparatecouncilwithintheNRFgoverned byacouncilofretailersandtechnologysolutionproviders. BatchClientInterface(BCI):AutilitythatprocessesmultiplecalculationrequestsusedwiththeRetail TaxExtractdeploymentofVertexIndirectTaxforRetail.BCIprovidesasinglemethodforloadingbatch calculationrequestsintotheVertexIndirectTaxOSeriesinstancelocatedatcentralheadquarters.BCI performsthisfunctionwithouttheneedforwritingspecialintegrationwiththefinancialsystem. Bracketschedules:VertexIndirectTaxforRetailenablesyoutoproducebracketschedulesifyourPOS systemcannotusedatabasetablesorARTSrelatedXMLtocalculatetaxatregisterlocations.Thisoption isonlyavailableforByBusinessLocationInStoreSales.BracketSchedulesarecreatedonlyforSingle RatetaxrulesandTieredTaxrulesthathaveataxableratetier.TheCalculationEngineidentifiesbracket taxjurisdictionsandappliestheirassociatedbrackettaxschedulelogic.Itcalculatesbrackettaxby multiplyingwholedollaramountsbystandardratesandthenapplyingfractionaldollaramountsto jurisdictionspecificbrackettaxschedulestodeterminethecorrecttax. DistributeTaxEvent:InVertexRetail,youusetheDistributeTaxeventtoacceptacombinedtotaltax amountforapurchaseandthendistributethattaxtotheappropriatejurisdictions.Thecombinedrates forthetaxingjurisdictionsareusedwiththetotaltaxamounttodeterminethetaxablebaseandthento redistributethecalculatedtaxestoeachlevelforremittance. Ecommerce:Consistsofthebuyingandsellingofproductsorservicesoverelectronicsystemssuchas theInternetandothercomputernetworks. EnterpriseTaxSolution:AnendtoendsolutionthatintegratesalltaxprocesseswithhostEnterprise ResourcePlanning(ERP)andBusinessIntelligence(BI)systemsonasingleplatformutilizingataxdata warehouse. Extracttransformload(ETL)program:Inmanagingdatabases,extract,transform,load(ETL)refersto threeseparatefunctionscombinedintoasingleprogrammingtool.
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First,theextractfunctionreadsdatafromaspecifiedsourcedatabaseandextractsadesiredsubsetof data.Next,thetransformfunctionworkswiththeacquireddatausingrulesorlookuptables,or creatingcombinationswithotherdatatoconvertittothedesiredformat. IndirectTax:ChargeleviedbytheStateonconsumption,expenditure,privilege,orrightbutnoton incomeorproperty.Customsdutiesleviedonimports,excisedutiesonproduction,salestaxorvalue addedtax(VAT)atsomestageinproductiondistributionprocess,areexamplesofindirecttaxes. IntraEuropeanUnion(EU)Transactions:Manybusinessestradewithcustomersandsuppliersin severalEUMemberStates.Suchtransactionsaresubjecttoacomplexframeworkofrulesthatare designedtodelivercertaintyandalevelplayingfield.Inparticular,theserulesdecidewhichcountryis entitledtoVATasotherwisedisagreementsbetweentaxauthoritieswouldarise,aswouldtheriskof doubletaxationornotaxation. InventoryMovement:Firmsoccasionallyhaveaneedtoremovegoodsfrominventoryandusethem fortheirowninternalconsumptionorpossiblyredirectthemforanotherpurposesuchasdonationtoa charitablecause.Ineithercase,taximplicationsmustbeexaminedaccordingtojurisdictionallaw. JavaAPI:Aninterface,writteninJava,whichisusedforaccessinganapplicationoraservicefroma program.AnAPImakesitpossibletouseprogramsfromwithinprograms;thereforeitisthefoundation formodularsystemswithclearlydefinedInterfacesbetweenseparatecomponents. LocalIndirectTaxEngine(LITE)Deployment:ThisdeploymentmodelforretailconsistsofafullVertex OSeriesinstanceresidingonaserveratcentralheadquartersandadeploymentoftheVertexOSeries calculationengineresidingonserversateachPOSlocation.Thesestoreleveldeploymentsarelight weightversionsofVertexOSeriesandincludejustthenumberoffilesneededtosuccessfullycalculate tax. ObjectorientedProgrammingTechniques:Atypeofprogramminginwhichprogrammersdefinenot onlythedatatypeofadatastructure,butalsothetypesofoperations(functions)thatcanbeappliedto thedatastructure.Inthisway,thedatastructurebecomesanobjectthatincludesbothdataand functions.Inaddition,programmerscancreaterelationshipsbetweenoneobjectandanother. PhysicalOriginoftheTransaction:Theplaceofsupplyofphysicaloriginsitustreatmentdefaultstothe locationfromwhichthesupplyphysicallyoriginates.Thetermphysicalorigincancorrespondtoa varietyofmeaningsincludingfirstremoved,serviceprovidersplaceofbusinessaddress(forservice transactions),orshipfromlocationaddress(forpersonalpropertytransactions). ReportingDatabaseImportService:TheReportingdatabaseImportServicemovesTaxJournaldatato theReportingdatabasestagingtable.ItalsosetsnewlineitemIDsforlineitemstobeimportedtothe Reportingdatabase.
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RetailTaxExtract(RTE)Deployment:Thisdeploymentmodelforretailexhibitsagreatdealofflexibility dependinguponthecapabilitiesandparametersofthecustomersPOSsystem.RTEreliesona companysnativePOStaxcalculationssoitdoesnotrequireaVertexOSeriesinstancedeployedateach storelocation,onlytheoneatcentralheadquarters. RTEStagingTables:DuringloadcalculationresultactivitiesintheRetailTaxExtractdeploymentmodel, thecalculationresultsareloadedintotablesintheRetailTaxExtractdatabase.Thesetablesholdthe datauntilfurthermovementand,assuch,arecalledstagingtables. SarbanesOxley(SOX):AUnitedStatesfederallawenactedonJuly30,2002,whichsetnewor enhancedstandardsforallU.S.publiccompanyboards,managementandpublicaccountingfirms. ItisnamedaftersponsorsU.S.SenatorPaulSarbanes(DMD)andU.S.RepresentativeMichaelG.Oxley (ROH).SOXwasenactedasareactiontoanumberofmajorcorporateandaccountingscandals,which costinvestorsbillionsofdollarswhenthesharepricesofaffectedcompaniescollapsed,shookpublic confidenceinthenation'ssecuritiesmarkets. ServiceOrientedArchitecture(SOA):Aflexiblesetofdesignprinciplesusedduringthephasesof systemsdevelopmentandintegration.AdeployedSOAbasedarchitecturewillprovidealoosely integratedsuiteofservicesthatcanbeusedwithinmultiplebusinessdomains. Situs:Fortaxpurposes,situsisdeterminedonthebasisofwhetherthestateimposingthetaxhas adequatecontactwiththepropertyitisseekingtotaxsothattheparticulartaxisjustifiedinfairness. Ordinarilypersonalpropertyhasitstaxablesitusintheplacewhereitsownerisdomiciledorinthestate wheretheownerhasatrue,fixed,andpermanenthome. SKU:ASKUorstockkeepingunitisauniqueidentifierforeachdistinctproductandservicethatcanbe purchasedfromasupplier. SQL:AlsoknownasStructuredQueryLanguage,isadatabasecomputerlanguagedesignedfor managingdatainrelationaldatabasemanagementsystems(RDBMS),andoriginallybasedupon relationalalgebraandcalculus. TaxEngineExtractfile:TheLocalIndirectTaxEngine(LITE)retaildeploymentmodelwhichresidesat theserverforeachPOSlocationusestheTaxEngineExtractfile,whichisgeneratedbycentral headquarters,toensureconsistenttaxcalculationacrossallPOSlocations. TaxEngineExtractutility:ExtractsVertexOSeriestaxdata,suchasspecialrates,rules,orexceptions, requiredtocalculatetaxateachindividuallocation.Thisutilityislocatedatthecentralheadquarters withafullVertexOSeriesdeployment. TaxGeographicalIdentificationSystem(TaxGIS):AGeographicInformationSystem(GIS)isatoolfor analyzingaspecificlocationusingmultipleoverlappinglayersofgeographicalinformation.
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VertexsTaxGISisageographicinformationsystemthatidentifiestaxingjurisdictionsbasedonthe physicallocationsofthesellersandpurchasers.TaxGISassignsaTaxAreaIDforeachunique combinationofoverlappingtaxingjurisdictionboundaries. TaxProcessingSystem(TPS):TPSisasoftwaredevelopmentkitthatcanassistusersinthetax complianceprocessbymaintainingtaxrates,rulesandregulations.TPSusesthisinformation(contained intheTPSdatabase)toaccuratelycalculatetaxforUSandinternationaltransactions. TotalCostofOwnership(TCO):Thetotalpriceinmoney,time,andresourcesofowningandusing software.TCOiswidelyconsideredtoincludethepurchaseprice,andthecostofhardwareandsoftware upgrades,maintenanceandtechnicalsupport,andtraining. TransactionLogfiles(TLogs):TLogsfilescontainthehistoryoftaxcalculationsexecutedbythePOS systemusingdatafromtheVertexforRetaildeploymentPOSTLogsareconvertedbyanExtract TransformLoad(ETL)programfromindividualbusinesslocationsintoaformatthatcanbeuploadedto theVertexOSeriesinstanceatcentralheadquarters. VertexAddressCleansing:AnintegratedsolutiondevelopedbyVertexinpartnershipwithSAPs BusinessObjects,thatdeliversZIPplus4addressprecisionforaddressdatacontainedinthehosts financialsystem. ExemptionCertificateManagement(ECM):IntegratedwithVertexOSeries,ECMenablesyouto manageyourorganizationssalesandusetaxexemptionandresalecertificatesinaWebbased application.ECMelectronicallystoressalesandusetaxexemptioncertificates.Yousimplyscanthe certificateandaddtheimagefiletothedatabase. VertexIndirectTaxReportingandAnalysis:EmbeddedineveryVertexOSeriesproduct,Reporting andAnalysisisaWebbasedapplicationthatprovidesflexiblereportingandanalysisofthetransaction dataandtaxabilitysetup.ReportingandAnalysisallowsyoutofocusonparticularjurisdictions,product groups,customersorcostcenterstoanalyzedeviationsfromtrendsorreviewareasidentifiedfor examination. VertexSales&UseTaxReturns(VertexReturns):TheoptionalVertexReturnssoftwareisa WindowsPCapplicationthatautomaticallyproducessignaturereadystateandlocalsalesandusetax returnsforU.S.andCanada,usingjurisdictionsummarytaxdatathatcanbeimportedfromeithera Vertexsalestaxcalculation,anothersystem,orthedatacanevenbeenteredmanually. XMLDataFile:XMLisauniversalstandardformatforexchangingdatabetweenapplicationsAnXML datafilecanbeviewedusingwebbrowserssuchInternetExplorer.Thedatahoweverisseparatedand independentfromthepageusedtodisplayit.
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VirtualizationEnvironment:Acomputersthatisrunninginavirtualmachineenvironment,whichisthe combinationofvirtualmachinemonitorandhardwareplatform.Forexample,VMwarerunningonan x86computerisavirtualenvironment.
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Foundedin1978,Vertexisaprivatelyheldcompanythatemploysmorethan650 professionalsatitsheadquartersintheU.S.(Berwyn,PA)withofficesinEurope (London),Brazil(SoPaulo),Atlanta,Dallas,Phoenix,Sarasota,andWashington,D.C. TolearnmoreaboutVertexandourpowerfulsuiteofinnovativeenterprisetax managementsolutions,visitourwebsiteatvertexinc.com.
VertexGlobalHeadquarters 1041OldCassattRoad Berwyn,PA19312 UnitedStates Phone:610.640.4200 Tollfree:800.355.3500 Fax:610.640.5892
vertexinc.com
EuropeanHeadquarters VertexGlobalTaxSolutions,LTD 1FurzegroundWay,StockleyPark Uxbridge,UB111EZ UnitedKingdom Phone:+44(0)2086223053 Fax:+44(0)2086223200 www.vertexgts.co.uk
2011VertexInc.Allrightsreserved.Vertex,theVertexlogo,WhereTaxationMeetsInnovation,andOSeriesarealltrademarksofVertexInc.Allothertrademarks areusedforidentificationpurposesonlyandarepropertiesoftheirrespectiveowners. 02.11

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Vertex IndirectTaxforRetail

Networkconnection 100BaseTorequivalent Theamountofdiskspacerequiredforallthreeserverswillvarydependinguponyourtransaction volumeanddataretentionrequirements.

VertexGlobalHeadquarters 1041OldCassattRoad Berwyn,PA19312 UnitedStates Phone:610.640.4200 Tollfree:800.355.3500 Fax:610.640.5892

EuropeanHeadquarters VertexGlobalTaxSolutions,LTD 1FurzegroundWay,StockleyPark Uxbridge,UB111EZ UnitedKingdom Phone:+44(0)2086223053 Fax:+44(0)2086223200 www.vertexgts.co.uk

2011VertexInc.Allrightsreserved.Vertex,theVertexlogo,WhereTaxationMeetsInnovation,andOSeriesarealltrademarksofVertexInc.Allothertrademarks areusedforidentificationpurposesonlyandarepropertiesoftheirrespectiveowners. 02.11

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