Patent Publication Number: US-2015066715-A1

Title: Fuel excise tax calculation and filing system and method

Description:
CROSS-REFERENCE TO RELATED APPLICATIONS 
     This application claims priority to U.S. Provisional Patent Application Ser. No. 61/872,435 (“Parent Provisional”), filed Aug. 30, 2013. The foregoing Parent Provisional is hereby incorporated by reference in its entirety as if fully set forth herein. 
    
    
     FIELD OF THE INVENTION 
     This disclosure relates generally to system for calculating state and federal taxes on fuels and filing tax returns to the IRS and the state taxing authorities and more specifically to systems and methods that can be setup and modified by a end user to handle the various fuel products handled by the end user without having to pay a third party software provider to modify software code. 
     BACKGROUND OF THE INVENTION 
     Many businesses involved in the movement of various fuel products are required to collect and report taxes at the point of sale. Fuel products include various gasoline products, diesel products, and natural gas products. Delivery mechanisms of fuel products include various pipelines, rail, tanks, trucks and dispensing products at the various stations. Various federal, state, and local fuel taxes may include fixed per gallon taxes as well as taxes as a percentage of the sales price. Fuel taxes may be imposed on terminal operators, on commercial transporters that travel through a state, even if the fuel is not purchased in that state, or on other modes of transferring fuels. Due to the number and variety of fuel products, the number of federal, state, and local taxes imposed, and the types and styles of transfers, software used to record, calculate, and file the tax reports needed to comply with the various agencies can be rather complex. End users of fuel tax calculation and filing software must often have software suppliers provide modifications to the software code when the end user decides to add a new product, modify a mode of disbursement, or fuel taxes are updated from the various taxing authorities. Modifying the software code is time consuming and costly. End users wishing to market new fuel products, alter modes of transporting those fuel products, or sell into new markets incur costly delays waiting on software updates. Thus, a need exists for a method and system that provides a fuel tax calculation and filing system that overcomes the above-noted deficiencies of prior art and can be setup and modified by a end user, to add products, categories of products and dates to all allow calculations of state and federal fuel taxes along with detecting errors and allowing the end user to correct those errors. 
     An object of the invention is to provide a fuel tax calculation and filing system and method that can be setup and modified by a end user to handle the various fuel products handled by the end user without having to have a software supplier modify the software code. 
     Another object of the invention is to provide a fuel tax calculation and filing system and method that has compliance matrix that allows the end user to make changes in the software, adding products and categories of products and dates to allow calculation of state and federal fuel taxes. 
     Another object of the invention is to provide a fuel tax calculation and filing system and method that is customizable by the end user to handle the tax calculation and filing for all fuels in all states. 
     Another object of the invention is to provide a fuel tax calculation and filing system and method that has an error checker that detects errors in data and classification and allows the end user to correct the errors. 
     BRIEF SUMMARY OF THE INVENTION 
     In accordance with some embodiments, a fuel excise tax software system includes an interface process operable to receive a plurality of external data and to generate, in response to the plurality of external data, a plurality of raw data. The fuel excise tax software system also includes a compliance matrix process operable to receive the plurality of raw data and a plurality of compliance rules and to generate, in response to the plurality of raw data and the plurality of compliance rules, a plurality of tax schedules. The fuel excise tax software system also includes a user interface operable to enable a user to view the plurality of compliance rules, the plurality of raw data, or the plurality of tax schedules. The user interface also allows the user to add to the plurality of compliance rules and to modify the plurality of compliance rules and the plurality of tax schedules. 
     In accordance with another embodiment, a method of calculating and filing a fuel excise tax is provided. In a fuel excise tax software system that includes an interface process software module, a compliance matrix process software module, and a user interface software module, the method includes receiving, by the interface process software module, a plurality of external data and generating a plurality of raw data, in response to receiving the plurality of external data. The method further includes the step of generating, by the compliance matrix process module, a plurality of tax schedules in response to receiving the plurality of raw data and a plurality of compliance rules. The method further comprises the steps of viewing, by the user interface software module, the plurality of compliance rules, the plurality of raw data, and the plurality of tax schedules. The method further comprises the steps of adding, by the user interface software module, one of the plurality of compliance rules and modifying, the plurality of compliance rules and the plurality of tax schedules. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
       A better understanding of the present system and method can be obtained when the following detailed description of an embodiment is considered in conjunction with the following drawings in which: 
         FIG. 1  illustrates, in block diagram form, an exemplary computer system could be used to illustrate various aspects of a fuel excise tax calculation and filing system according to some embodiments; 
         FIG. 2  illustrates in flow diagram form, a fuel excise tax calculation and filing system according to some embodiments; 
         FIG. 3A  is a screen display illustrating an exemplary view of the raw data database as viewed through a graphical user interface according to some embodiments; 
         FIG. 3B  is a continuation of the screen display of  FIG. 3A  illustrating an exemplary view of the raw data database as viewed through a graphical user interface according to some embodiments; 
         FIG. 4A  is a screen display illustrating an exemplary view of the compliance rules database as viewed through a graphical user interface according to some embodiments; 
         FIG. 4B  is a continuation of the screen display of  FIG. 4A  illustrating an exemplary view of the compliance rules database as viewed through a graphical user interface according to some embodiments; 
         FIG. 4C  is a continuation of the screen display of  FIG. 4B  illustrating an exemplary view of the compliance rules database as viewed through a graphical user interface according to some embodiments; and 
         FIG. 5  illustrates, in flow diagram form, a compliance matrix method for the fuel excise tax calculation and filing system, according to some embodiments; 
         FIG. 6A  is a screen display illustrating use of the user interface to review errors detected in the databases according to some embodiments; and 
         FIG. 6B  is a screen display illustrating use of the user interface to correct errors detected in the database according to some embodiments. 
     
    
    
     In the drawings, similar elements will be similarly numbered whenever possible. However, this practice is simply for convenience of reference and to avoid unnecessary proliferation of numbers, and is not intended to imply or suggest that our invention requires identity in either function or structure in the several embodiments. 
     SPECIFICATION 
     Detailed Description  FIG. 1  illustrates, in block diagram form, an exemplary computer system  100  that could be used to illustrate various aspects of a fuel excise tax calculation and filing system according to some embodiments. The computing system  100  includes a central processing unit (CPU)  102  and a memory system  104 . The CPU  102  is operably connected to the memory system  104  by a bus system such as one or more Peripheral Component Interconnect extended (PCIx) buses, industry standard architecture (ISA) buses, Accelerated Graphics Port (AGP) buses, and the similar buses utilized for these types of computer systems as known to one of ordinary skill in the art. The CPU  102  incorporates any one of several microprocessors such as Celeron™, Core i3™, Core i5™, etc. from Intel Corp. or other similar microprocessors as known to one of ordinary skill in the art. The memory system  104  may include a memory controller or the like and be implemented with one or more circuits such as DDR, DDR2, DDR3 although any memory configuration is contemplated. 
     The computing system  100  may include one or more output device such as a monitor or display  106  operably connected to the CPU  102  via an appropriate video card  108 . One or more input devices may also be provided such as a mouse  110  and a keyboard  112 , each operably connected via an appropriate controller  114  as known to those skilled in the art. A storage system  116  is operably coupled to the bus system and may include any one or more data storage devices, such as one or more disk drives including floppy and hard disk drives, solid state drives, flash drives, one or more CD-ROMs, DVDs, Blu Ray disks, one or more tape drives, or any other storage means, etc. The input and output devices enable a user to interact with the computing system  100  for purposes of utilizing the fuel excise tax calculation and filing system, as further described below. 
     A fuel excise tax calculation and filing software system according to the present invention may be stored in the storage system  116 . This fuel excise tax application program is retrieved into the memory system  104  and executed by the CPU  102 . As described more fully below, the application program retrieves local files, such as stored in the storage system  116 . Although reference is made in the specification and claims to computer files, it is understood that the term files encompasses documents and any other digital object that contains machine or individual readable or searchable information. The computing system  100  is included to illustrate that a fuel tax calculation and filing system and method, according to the present invention, may be realized on a modern computing machine with a CPU, random access memory (RAM) and external storage, such as the storage system  116 . The computer system  100  enables a user-friendly graphic user interface (GUI) implementation with display and input capabilities. There are no explicit restrictions on CPU architecture or display technology. 
       FIG. 2  illustrates in flow diagram form, a software fuel excise tax calculation and filing method and system  200  according to some embodiments. The fuel excise tax calculation and filing method and system  200  generally includes an external data source  202  and an interface process  204 . The external data source  202  generally includes transactional data representing business&#39;s movements of oil and gas products and typically are an output from accounting and tracking software provided by companies such as SAP, Oracle and other software providers. The external data source  202  may be stored in the memory system  104  of  FIG. 1  or stored on the storage system  116  of  FIG. 1 . The external data source  202  may also be read across a network (not shown) or by any other means understood by one of ordinary skill in the art. The interface process  204  generally includes an application programming interface (API) adapted to read the data from the external data source  202 . The interface process  204  reads the data records from the external data source  202 , generates corresponding raw data records and writes those raw data records to the raw data database  206 . The raw data database  206  is generally a database analogous to those generated by SAP, Oracle and other providers. The raw data database  206  may be generally stored as a relational database and operable to respond to commands written in any language such as Structured Query Language (“SQL”) database programming language and other suitable database programming languages. The raw data database generally includes transactional records where each record represents a sales transaction, a transfer transaction, or other similar transactions understood by one of ordinary skill in this art. Each individual record generally includes multiple fields as further described below. The raw data database  206  may be stored in the memory system  104  of  FIG. 1  or stored on the storage system  116  of  FIG. 1  or accessible via other means understood by one of ordinary skill in the art. 
     The raw data database  206  may be accessed by a user using the graphical user interface (GUI)  208 . The GUI  208  is a software module that allows users to interact with the raw data database  206 , the rules tables database  210 , and the taxing authority schedules database  212 . Referring to  FIG. 3A  and  FIG. 3B , screen displays illustrate exemplary views of the raw data database as viewed through the GUI according to some embodiments. Each record received from the external data source  202  of  FIG. 2  and written into the raw data database  206  of  FIG. 2  contains multiple fields, as illustrated in  FIG. 3A  and  FIG. 3B . One such exemplary field is the matrix code field  302 , representing the type of transfer associated with the transactional data. Exemplary transfer types may include non-taxable exchanges between parties, taxable purchases from one party by another, and other similar transfer types understood by one of ordinary skill in this art. Another exemplary field is the product code  304 , representing the type of product transferred. Exemplary types of products include motor fuel, gasoline, distillates, diesel, special fuels and other similar fuel types understood by one of ordinary skill in this art. Each of these various products have a unique and specific product code. Table 1 provides a non-limiting list of other exemplary fields available in the raw data database  206 . 
     
       
         
           
               
             
               
                 TABLE 1 
               
             
            
               
                   
               
               
                 Exemplary Fields of Raw Data Database 
               
            
           
           
               
               
               
               
            
               
                 Matrix Code 
                 Company Code 
                 Tax Year 
                 Month Due 
               
               
                   
               
               
                 Product Code 
                 Mode Code 
                 Bill of Lading 
                 Bill of Lading 
               
               
                   
                   
                 No. 
                 Date 
               
               
                 Bill of Lading 
                 Bill of Lading 
                 Bill of Lading 
                 SS Point of 
               
               
                 Net 
                 Gross 
                 Billed 
                 Origin Code 
               
               
                 Point of Origin 
                 Point of Origin 
                 Point of Origin 
                 Point of Origin 
               
               
                 TCN 
                 Country 
                 State 
                 City 
               
               
                 Point of Origin 
                 Point of Origin 
                 SS Point of 
                 Point of Desti- 
               
               
                 ZIP Code 
                 ZIP + 4 
                 Destination Code 
                 nation TCN 
               
               
                 Point of Desti- 
                 Point of Desti- 
                 Point of Desti- 
                 Point of Desti- 
               
               
                 nation Country 
                 nation State 
                 nation City 
                 nation ZIP Code 
               
               
                 Point of Desti- 
               
               
                 nation ZIP + 4 
               
               
                   
               
            
           
         
       
     
     Referring back to  FIG. 2 , the compliance rules database  210  may be viewed, edited and modified by the user using the GUI  208 . The compliance rules database may include both taxing authority rule sets and user created rule sets. Taxing authorities provide a set of certified rule sets for compliance checking which are loaded into the compliance rules database as data is normally loaded into a database as understood by one of ordinary skill in the art. Referring to  FIG. 4A ,  FIG. 4B , and  FIG. 4C , screen displays illustrate exemplary views of the compliance rules database as viewed through the GUI  208  according to some embodiments. Each line represents a compliance matrix rule for a party and includes compliance criterion provided by the taxing authority or created by the user. Each line includes multiple fields with each field providing the criteria for that particular field, indicated by the header. Other compliance criteria may be included in the compliance matrix rule by the party seeking to file their taxes using this application software for the fuel excise tax calculation and filing method and system  200 . Additionally, criteria may be edited, augmented, or changed by the party based upon the specific need. Some fields in the rule are editable and some fields are fixed and may not be edited. 
     As an example, referring to  FIG. 4A , the first compliance rule in the database has a non-editable field labeled “compliance key”  402  and is assigned the value of 1, hereinafter referred to as Rule No. 1. Reading across the line, Rule No. 1 has an “effective from” field  404  and is assigned the value of “Jan. 1, 2010”. Rule No. 1 also has an “effective to” field  406  and is assigned the value of “Dec. 31, 2099”. These dates are criteria against which transactions from the raw data database  206  will be assessed, as further described below. Referring to  FIG. 4B , which is a continuation of the database view, Rule No. 1 has a “product code” field  408  that is assigned a value specified as the logical list of product codes. In this case, the “product code” of Rule No. 1 has been assigned a text string value of “&lt; &gt;171̂&lt; &gt;241”. The character “̂” represents a separator between values. The characters “&lt; &gt;” represent a NOT clause, logically matching all codes that are not the code following the character string. In this example, the string “&lt; &gt;171” would match all product codes that are NOT the numeric code “171” and NOT the numeric code “241”. Other characters used in defining this field may include the “%” character, representing a wildcard that allows any value for the column. As can be seen from this example, product codes  408  may be a single value, may be a list of values, or may be a list of negative values. Negative values are products that are not valid for the specific rule. Referring to  FIG. 4C , other exemplary fields include the mode of transport code  410  and the tax schedule code  412 . The tax schedule code  412  provides for a list of valid tax schedules for which the specific rule is applicable. The tax schedule code  412  may be a single schedule, or may be a list of schedules. 
     Referring back to  FIG. 2 , the compliance matrix process  214  receives input from the raw data database  206  and the compliance rules database  210  and after executing the compliance matrix method, outputs a taxing authority schedule record to the taxing authority schedules database  212 . Referring to  FIG. 5 , an illustration is provided, in flow diagram form, of a compliance matrix process method  500  for the fuel excise tax calculation and filing system, according to some embodiments. As shown in  FIG. 5 , the method for compliance checking analyzes each of the transactional records in the raw data database  206  of  FIG. 2  (see,  502 ). The initial step of the compliance checking process is confirming the validity of the product code  304  of  FIG. 3A  (see,  504 ). If the product code  304  in invalid, the transaction is marked for later analysis (see,  506 ), the transaction containing the invalid product code  304  is written to the taxing authority schedules database  212  of  FIG. 2 , the analysis for that transaction is terminated and the next transactional analysis is initiated. Valid product codes are recorded (see,  508 ) and are saved to the taxing authority schedules database  212  of  FIG. 2  after the transaction has been fully checked for compliance and the full record has been created as described further below. 
     Compliance matrix method  500  next confirms that the product transaction being processed is a reportable product (see,  510 ). A reportable product transaction is one which does not necessarily require a tax to be paid, but may need to be recorded on a separate schedule. Product code  304  of  FIG. 3A  provides the basis for this determination. Non-reportable product transactions are marked as non-reportable (see,  512 ), the transaction containing the non-reportable product code  304  is written to the taxing authority schedules database  212  of  FIG. 2 , the analysis for that transaction is terminated and the next transactional analysis is initiated. Reportable product codes are recorded (see,  514 ) and are saved to the taxing authority schedules database  212  after the transaction has been fully checked for compliance and the full record has been created as described further below. 
     Upon determining that a valid, reportable product is being analyzed, the compliance matrix method  500  proceeds to analyze each field in the transactional record. For each field contained in the transactional record, the compliance matrix method  500  first validates the field is not a NULL value (see,  516 ). If the field under analysis is found equal to NULL, the process moves to the next field without taking further action. If the field is not found equal to NULL, the compliance matrix method checks that the field value is valid (see,  518 ). Validity of a specific field could be merely that it exists, or that is complies with specific criteria. Table 2 provides the expected values for each field against which validity of the field is checked. 
     
       
         
           
               
             
               
                 TABLE 2 
               
             
            
               
                   
               
               
                 Compliance Matrix Field Value 
               
            
           
           
               
               
               
            
               
                   
                 Field 
                 Value 
               
               
                   
                   
               
            
           
           
               
               
               
            
               
                 1. 
                 Return Type 
                 True 
               
               
                 2. 
                 Effective From Date 
                 Valid based 
               
               
                   
                   
                 on date 
               
               
                 3. 
                 Effective To Date 
                 Valid based 
               
               
                   
                   
                 on date 
               
               
                 4. 
                 Active Flag 
                 True 
               
               
                 5. 
                 Matrix Code Value 
                 True 
               
               
                 6. 
                 Point of Origin TCN 
                 True 
               
               
                   
                 Value 
               
               
                 7. 
                 Point of Origin Country 
                 True 
               
               
                   
                 Value 
               
               
                 8. 
                 Point of Origin State 
                 True 
               
               
                   
                 Value 
               
               
                 9. 
                 Point of Origin City 
                 True 
               
               
                   
                 Value 
               
               
                 10. 
                 Point of Destination 
                 True 
               
               
                   
                 TCN Value 
               
               
                 11. 
                 Point of Destination 
                 True 
               
               
                   
                 Country Value 
               
               
                 12 
                 Point of Destination 
                 True 
               
               
                   
                 State Value 
               
               
                 13. 
                 Point of Destination 
                 True 
               
               
                   
                 City Value 
               
               
                 14. 
                 Product Code Value 
                 True 
               
               
                 15. 
                 Mode of Transport Code 
                 True 
               
               
                 16. 
                 IncoTerms Value 
                 True 
               
               
                 17. 
                 License Code Value 
                 True 
               
               
                 18. 
                 Buyer Taxpayer No. Value 
                 True 
               
               
                 19. 
                 Destination IRS Terminal 
                 True 
               
               
                   
                 Flag Value 
               
               
                 20. 
                 Source System Point of 
                 True 
               
               
                   
                 Destination Value 
               
               
                 21 
                 Source System Point of 
                 True 
               
               
                   
                 Origin Code Value 
               
               
                 22. 
                 Exchange Flag Value 
                 True 
               
               
                 23. 
                 Product Authorization Flag 
                 True 
               
               
                   
                 Value 
               
               
                 24. 
                 Gallons From Value 
                 True 
               
               
                 25. 
                 Gallons To Value 
                 True 
               
               
                 26. 
                 User Defined Field 1-10 
                 True 
               
               
                   
                 Value 
               
               
                   
               
            
           
         
       
     
     Valid field values are recorded (see,  520 ) and are saved to the taxing authority schedules database  212  of  FIG. 2  after the transaction has been fully checked for compliance and the full record has been created. Compliance matrix method  500  repeats this set validation loop until the last field is detected (see,  522 ). Upon reaching the last field, compliance matrix method  500  checks that the expected fields are valid (see,  524 ). If the any fields are determined to be invalid, the analysis for that transaction is terminated and the next transactional analysis is initiated. If all fields are determined to be valid, the schedule code  412  of  FIG. 4C  is recorded and the transactional record is saved to the taxing authority schedules database  212  of  FIG. 2  (see,  526 ). 
     Upon completing the compliance analysis for each transaction, the taxing authority schedules database  212  contains a completed set of transactions identified with valid data and identified with specific schedules. Referring to  FIG. 2 , the GUI  208  may be used by the user to review, modify, and/or correct the data within the taxing authority schedules database  212 . If errors are found, the user may review, modify, and/or correct the rules contained within the compliance rules database  210 . Where errors or warnings are found, the specific rule is traced via the compliance key  402  of  FIG. 4A . Modifications to compliance rules database  210  are saved and the process is repeated. Once the data is deemed sufficient, the form calculation process  216  provides a means for generating EDI, paper, or electronic returns  218 . 
     Referring to  FIG. 2 , form calculation process  216  receives input from the taxing authority schedules database  212  as well as the compliance rules database  210  and based upon the value the schedule code  412  of  FIG. 4C  generates a set of tax schedules in a variety of formats, including EDI, paper, or electronic returns. This processes of generating EDI formatted returns, PDF formatted returns and other similar formats are well known to those of ordinary skill in the art. 
     As an example,  FIG. 6A  and  FIG. 6B  are screen displays illustrating use of the user interface  208  of  FIG. 2  to review and correct errors and warnings detected in the compliance rules database  210  of  FIG. 2  and in taxing authority schedules database  212  of  FIG. 2  according to some embodiments. In this example, errors and warnings have been detected and the user may view those errors using the user interface  208  of  FIG. 2  as shown by  FIG. 6A  and  FIG. 6B . “Category”  602  lists several types of errors and warnings detected, as indicated by “Error Type”  604 . As one specific example, on line 2 of the exemplary screen display, the “Category”  602  has been assigned the value “buyer FEIN”. Reading across line 2, “Error Type”  604  has been assigned the value “E” indicating the FEIN number in the record is erroneous and should be corrected. Upon review, the user may open a different screen, illustrated in  FIG. 6B , and apply corrective measures, modifying the data directly in the database for subsequent analysis. Here, the field “Buyer Type”  606  is illustrated being assigned a different value. Similar screens are available via the user interface  208  of  FIG. 2  for viewing, adding, and/or modifying the various database discussed above. 
     Updates to the fuel excise tax calculation and filing method and system  200  are affected by the end user, without a need to modify underlying software code. Thus it is apparent that we have provided a method and system that provides a more effective means of effecting updates to the fuel excise tax calculation and filing method and system  200  without the need and expense of modifying the underlying code. Those skilled in the art will recognize that modifications and variations can be made without departing from the spirit of our invention. Therefore, we intend that our invention encompass all such variations and modifications as fall within the scope of the appended claims.