Presented by: Dan Sullivan, CEO Assisted by: Scott H. Walters, Vice President, Research & Development Jon W. Abolins

1. TAXWARE International’s Transaction Tax Server as an eCommerce Tax Solution Presented by: Dan Sullivan, CEO Assisted by: Scott H. Walters, Vice President, Research & Development Jon W. Abolins, Director, Tax Department

2. Adapting Tax Technology • Sales/Use Tax & WORLDTAX Systems • Address driven (privacy) • Customizable by Merchant • Handles exempt sales by product or customer exemption • Creates Audit trails • Generates Tax Forms or records for electronic transmission • The Transaction Tax Server (TTS) • The “no fault” concept and TTS

3. MERCHANT DATA (Nexus, Address, Etc.) TAX RATES PRODUCT TAX RULES STEP (Customer Exemption) VERAZIP (Address Verify) MERCHANT PROCESSING ReMIT (Compliance) TAX CALCULATION (S/U Tax) (WorldTax) Audit File UNIVERSAL TAX LINK (Data) Existing TAXWARE SystemsThe SALES/USE Tax System

4. Existing TAXWARE SystemsThe ReMIT System • Platform independent • Supports all TAXWARE systems • Internet-ready for eCommerce reporting

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

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

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

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

9. TAXWARE Tax Calc. Audit File TAXWARE’s ReMIT TAXWARE’s ReMIT Summary Summary Internet Transmission Audit File Mapping Software Audit File Other Tax Sources Using TAXWARE’s ReMIT as a “Data Highway” Tax Server Tax Authority

10. TTS Benefits to the Merchant • The Merchants would no longer have to; • -monitor tax rate changes • -monitor tax law changes • -maintain in-house tax Systems • Transaction based fees - even the smallest of Merchants • could afford it • If “no fault” is implemented • Benefits to the Merchant • No longer required to collect taxes • No longer required to complete & submit complicated tax • forms & payments • Fewer or no time consuming audits Merchant

11. “No Fault” Benefits to The Tax Authorities • No need to change existing tax laws or rules • Tax Authorities receive revenues & data at the time • of the transaction • Tax Authorities can supply data directly to the server • and monitor the application of rates & laws • Tax Authorities can continue to use existing back office • Systems - the cost to convert is relatively minor • Audit overhead is reduced - Merchants are offered a • “fault free” option for using the TTS • The TTS Concept along with “No Fault” • offers the Tax Authorities an opportunity • to simplify taxes Tax Authority

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