Use tax optimization process and system

Abstract

A computer system and method for a lessor to determine correct use tax on moveable equipment which may be subject to tax by more than one tax authority comprising inventory records for each individual item of equipment comprising an equipment identifier, equipment category, acquisition cost, depreciation, net book value, and branch; updating the inventory records to reflect each modification, improvement, disposition, and change in equipment category, and use tax paid; activity records comprising each lease event pertaining to each item of equipment; and a set of tax rules, which are periodically updated, for each taxing authority where any of the items of equipment may be leased or used, comprising sets of formulas reflecting relationships between tax due and acquisition of equipment, first leasing of equipment, subsequent leasing of equipment, length of lease term, age of equipment, and/or equipment categories. Upon selection of a tax authority and a date range, the amount of tax which is due to the selected tax authority for each item of equipment is automatically determined and, upon verification that tax will be paid, the inventory records are updated to reflect tax paid. Upon querying the system to determine availability of equipment of a selected class, delivery branch, and date range, the system preferably ranks available equipment according to the amount of use tax which will be due upon leasing.