Across the United States, certain state and local governments have established special tax areas to support local objectives such as schools, police and fire departments, transit systems and new sports stadiums and facilities. Proxix Solutions has developed its Special Tax Districts (SpTD) database to help enterprises identify whether or not a special tax is applicable for U.S. addresses. The SpTD database integrated into Proxix's Site-US Tax solution provides the SpTD ID, Type and Name.
Special tax districts add additional complexity to tax jurisdiction assignments. That is why municipalities and counties rarely collect all the owed tax receipts. Many enterprises either do not remit because they are not sure what agency to remit to or remit to the wrong taxing authority because they are identifying tax jurisdictions based on postal ZIP Codes. ZIP Codes or ZIP+4s do not coincide with tax boundaries, therefore are not accurate for tax jurisdiction assignment.
In the city of Arab, Alabama, for instance, ZIP Code 35016 falls into several counties, inside and outside the municipality boundaries of the city, and partly inside and outside of a Police Jurisdiction. Depending where an address is physically located, the applicable tax rates vary between 5-11 percent. To accurately assign tax jurisdictions where ZIP Codes cross multiple boundaries, a spatial solution is needed.
"In today's environment every jurisdiction experiences a revenue pinch, and with the creation of more special tax districts covering small pieces of geography, it is nearly impossible to achieve a precise location of an address based upon ZIP+4 to identify all the various tax levels associated with an address," stated Dan Lawson, director of tax, Proxix Solutions.
Proxix's GIS and tax experts developed Site-US Tax, an automated spatial solution that combines Proxix's Geospatial Enterprise (.Net framework), high-precision geocoding and spatial analytic technology integrated with its tax databases including SpTD, Sales and Use, and industry-specific tax databases. In simpler terms, Site-US Tax locates the physical location of a service or delivery address, analyzes the location relative to the municipality boundaries, assigns it to the proper tax jurisdiction and appends the up-to-date tax information including the FIPS Place Code, Tax Remittance and Distance to the tax boundary. Site-US Tax is compatible with popular tax rate software and is available for in-house installation or as a Web service.
"Situsing for local taxes has always been important for a tax department, and the most common methodology for assigning tax jurisdictions used is ZIP Code or ZIP+4. However, accurate situsing has become increasingly difficult with the growing number of local tax jurisdictions and their various tax types," said Dan Lawson, director of tax for Proxix Solutions. "Without a spatial solution to accurately identify taxing jurisdictions based on the physical location of an address, those enterprises using ZIP Code or ZIP+4 are at a higher risk for audit penalties and/or fines for inaccurate situsing."
For more information about Proxix's Special Tax District database or Site-US Tax, visit http://www.proxix.com/taxsolutions.php.
About Proxix Solutions
Proxix Solutions develops location intelligence products and enterprise solutions that provide businesses with actionable information to make smarter decisions, understand and mitigate risks, cultivate profitable customer relationships and increase market penetration. Proxix Solutions, a privately held company, was founded in 2003 by the same management team responsible for developing many geospatial industry firsts, including the first national address geocoder. Headquartered in Palm Harbor, FL, Proxix has offices in Boulder, CO and Madison, WI. For more information on Proxix, visit www.proxix.com.
For more information contact: Lynn Bates Email: Email Contact Tel: 727.781.2662, ext 313