CATEGORY: Data Quality
REVIEWER: Dan Lawson, manager of tax systems and controls for Verizon.
BACKGROUND: Verizon Communications, formed by the merger of Bell Atlantic and GTE, is one of the world's leading providers of high-growth communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States, with more than 125 million access-line equivalents and 28 million wireless customers. The company has more than 259,000 employees; and its global presence extends to 44 countries in the Americas, Europe, Asia and the Pacific.
PLATFORMS: The company operates Group 1's GeoTAX on the mainframe and UNIX.
PROBLEM SOLVED: Telecommunications companies have historically had difficulty accurately determining the tax jurisdictions in which their customers reside. This is due to the continual changing of tax boundaries coupled with the tremendous number of telecommunications taxes and fees assessed by different governmental bodies at the federal, state and local levels. While many major tax compliance systems assign tax jurisdiction based on a standard five-digit ZIP code, this can be quite problematic. Many ZIP codes are so large they encompass multiple counties, municipalities or unincorporated areas. To help provide for accurate customer taxation, Verizon utilizes Group 1's GeoTAX, a comprehensive suite of tools that standardizes customer address at the more granular ZIP+4 level. GeoTAX appends information regarding state, county, municipal place and special tax jurisdictions, providing the most current, accurate tax jurisdiction assignment information. The solution provides the most up-to-date tax jurisdiction information by offering exclusive access to a database that continually tracks and updates taxation boundary files nationwide.
PRODUCT FUNCTIONALITY: We are currently utilizing GeoTAX in three key operating segments, including our largest area long distance comprising 5 million customers. In total, we use GeoTAX to provide accuracy in tax jurisdiction assignment for the records of more than 10 million customers. Using GeoTAX reduces our audit assessment and limits the potential that we will be involved in lawsuits stemming from inaccurate taxation. GeoTAX improves our compliance with state and local tax provisions and facilitates the accuracy of local level taxation throughout our operating areas. Eventually, we would like to use GeoTAX in all order-entry systems, tying the solution to every touchpoint that takes customer orders, including call centers. Due to GeoTAX's performance and value, each year we allocate additional resources to secure more licenses, with a goal of using the solution across our approximately 80 enterprise-wide platforms.
STRENGTHS: Since implementing GeoTAX, the number of calls we receive from our customers claiming they have been taxed inaccurately has dropped significantly. Using GeoTAX also enables us to ensure that we are not incorrectly charging or remitting funds to governmental bodies. Assignment of incorrect tax jurisdiction to an address could lead to local, county and state audit assessment. Additionally, in states where municipal boundaries change frequently, GeoTAX is indispensable in providing for accurate situsing.
WEAKNESSES: While we are very pleased with GeoTAX in the majority of our service areas, there are some geographic areas where the product is less effective assigning tax jurisdictions.
SELECTION CRITERIA:While working at GTE, I worked closely with Group 1 as they developed GeoTAX, so I am very familiar with the solution. We utilize GeoTAX since there really is no other product on the market today providing similar functionality.
DELIVERABLES: GeoTAX first validates, corrects and formats every element of an address and appends a ZIP+4 code to the address for greater geographical precision. Once an address has been verified, the correct tax jurisdiction information is assigned to the address utilizing a 10-digit character FIPS (Federal Information Processing Standard) code. When this information is fed into third-party tax compliance and billing systems, we can determine the taxes assigned to each purchase.
VENDOR SUPPORT:The vendor has been very good to work with, particularly their professional services staff. These individuals are essential in helping us leverage our GeoTAX investment. For example, Group 1 incorporated additional functionality into GeoTAX to accommodate our particular need for a solution that could handle special tax districts.
DOCUMENTATION: While I don't need to drill down too deeply into the documentation, the areas I am familiar with are sufficient for my needs.
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