||||||||||||||||||||||||||||||||||||||
`
`U3005774872A
`
`United States Patent
`
`[19]
`
`[11] Patent Number:
`
`5,774,372
`
`[451 Date of Patent: Jun. 30, 1998
`Golden et al.
`
`
`
`[54]
`
`[7'5]
`
`AU'l‘OMA’I'lfll) TAXABLE TRANSACTION
`REPORTINGXCOLLEC'I‘ION SYSTEM
`
`Inventors: Richard Golden, 15530 Windmill
`Pointe, Grosse Pointe, Mich. 48320;
`Joel R. Stanesa, Clawson, Mich.
`
`[73]
`
`Assignee: Richard Golden, Grosse Pointe, Mich.
`
`[31]
`
`Appl. No; 717,977
`
`[22
`
`Filed:
`
`Sep. 23, 1996
`
`[63]
`
`[51]
`
`[51’]
`
`[58]
`
`156]
`
`Related U.S. Application Data
`
`Continuation of Scr. No. 414.944. Mar.
`cloned.
`
`.31, 1995, aban-
`
`Int. Cl.‘5 ........................... 0061* 17160; (1061: 157100
`U.S. CI.
`................................. 705119; 705120; 705121;
`705131; 2351376; 2351383; 2351385
`Field of Search ..................................... 3951219, 220,
`395.1221, 211:, 217, 224, 231; 2351375,
`385
`
`References Cited
`
`U.S. PATENT DOCUMENTS
`
`3,156,412
`3,946,220
`4,144,567
`4,814,985
`4,912,504
`5,138,549
`5,220,501
`5,335,169
`5,335,171
`5,396,417
`5,398,199
`5,420,405
`5,510.979
`5,623,403
`
`............................ 2351146
`1111964 Julius et a1.
`311976 Brobeck et a].
`. 3951225
`.
`3119719 Tadakuma et al.
`..... 3641405
`
`311989 Swistak ...............
`
`1111990 Daniel, Jr. cl al
`. 3641408
`811992 Bern ....................
`
`..... 3041408
`611993 Lawlor ct al.
`..
`3641408
`811994 (Thong .........
`
`3641405
`811994 Fuyama .......
`. 3641401 R
`311995 Burks et a1.
`..... 1941216
`311995 Ranon cl at.
`
`511995 Chasek ................. 2351329
`
`411996 Modcri ct al.
`..
`.
`..
`
`411997 Highbloont
`3951228
`
`OTHER PUBLICATIONS
`
`Author Unknown, “'l‘axing issues", Industry Week, vol. 244,
`No. 13, p. 13—l)ialog l-‘ile 47,Acc. 1104287447, 1111.3, 1995.
`Author Unknown, “This Week’s Lead Story #1: Highway—
`master, TTSl
`to Offer Automated Fuel Tax Reporting",
`tnsidcits, 3 pages, Dialog liile 16,Acc 406366082, Sep. 11,
`1995.
`
`Everest; Database Management Textbook Published by
`McGraw—Ilill, Inc. in 1986; p. 746.
`. at the Touch of
`.
`The Office, “Paper—Free Tax Returns .
`Your Telephone”, The Oflicc, V118, n1,p. 22(1), Dialog File
`75, Ace 400163347.
`“Its the IRS Prepared for your Tax retum't", Weiner,
`Leonard, US News 8.: World Report, 100 p. 51(2), Mar.
`1986, Dialog File 4'1, Acc #0280065”).
`
`Prtttttrtjv Exntttttter—David R. Hudspetb
`Assistant Exmtiitrer—Joseph Thomas
`Attorney, Agent, or Finn—Gifford, Krass, Groh, Sprinkle,
`Patmore, Anderson & (.‘ilkowrtki, RC.
`
`[57]
`
`ABSTRACT
`
`An automated transaction tax reporting1collection system.
`The system includes individual point of sale terminals
`disposed at each remote vendor location. The point of sale
`terminals are networked to a central computer, preferably
`via a plurality of intermediate data collection sub-stations.
`Each terminal includes means for inputting and storing data
`regarding taxable transactions, as well as for storing data
`reflecting the tax accrued on each transaction. This stored
`data is collected on a periodic, rotating basis by the corre-
`sponding data collection sub—station according to control
`signals generated by the central computer. All of the col—
`lected data is ultimately transmitted to the central computer,
`which is operative to generate reports reflecting the trans-
`action tax due from each remote vendor location. These
`
`reports ma)r then be sent to the taxing authority, the indi-
`vidual merchants, and1or to other taxing authorities, such as
`the federal government. Preferably, each point of sale ter—
`minal also includes a printer which prints an oflicial tax
`receipt for each transaction recorded.
`
`9 Claims, 3 Drawing Sheets
`
`
`
`
`
`
`
`
`
`Page 1 of 9
`Page 1 of 9
`
`FIS Exhibit 1012
`FIS Exhibit 1012
`
`

`

`US. Patent
`
`5,774,872
`
`
`
`(cid:51)(cid:68)(cid:74)(cid:72)(cid:3)(cid:21)(cid:3)(cid:82)(cid:73)(cid:3)(cid:28)
`
`

`

`US. Patent
`
`Jun. 30, 1998
`
`Sheet 2 on
`
`5,774,872
`
`FIG-2
`
`
`
`(cid:51)(cid:68)(cid:74)(cid:72)(cid:3)(cid:22)(cid:3)(cid:82)(cid:73)(cid:3)(cid:28)
`
`

`

`US. Patent
`
`Jun. 30, 1998
`
`Sheet 3 on
`
`5,774,872
`
`
`
`(cid:51)(cid:68)(cid:74)(cid:72)(cid:3)(cid:23)(cid:3)(cid:82)(cid:73)(cid:3)(cid:28)
`Page 4 of 9
`
`

`

`5,774,872
`
`1
`AUTOMATED TAXABLE TRANSACTION
`REPORT INGICOLLICCTION SYSTEM
`
`This is a continuation of application Ser. No. 08l414,944
`filed on Mar. 31, 1995 now abandoned.
`
`5
`
`FIELD OF THE INVENTION
`
`This invention concerns the field of automatic tax calcu-
`lation and collection and, more particularly, to such a system
`including a network of point of sale terminals linked to a
`central data analysis and tracking location via a plurality of
`data collection sub-stations.
`
`“J
`
`DESCRIPTION OF THE RELEVANT PRIOR ART
`
`The budgets ofmany governmental authorities are heavily
`dependent upon the accurate calculation and collection of
`various type of “transaction” taxes. For example,
`these
`transaction taxes include sales taxes, taxes on services, value
`added taxes, etc. Such transaction taxes automatically accrue
`each time such a transaction (whether sales, services, etc.)
`occurs or is performed. As can well be imagined, the number
`of taxable transactions occurring on a daily basis within the
`juridication of a
`typical
`taxing authority is huge. For
`example, the number of individual sales made daily in a state a
`which imposes a sales tax is enormous, and can easily run “
`into the tens of millions or even more.
`
`Due to the sheer magnitude ofsuch transactions, keeping
`track of each individual one has heretofore proved impos-
`sible. Thus, the only practical method of collecting transac-
`tion taxes has been to impose the obligation upon the seller
`or service provider to automatically add the tax due onto the
`consumer's bill for goods or services. Thus, the merchant
`collects the tax from the customer as the sale of goods or
`services occurs. Electronic cash registers which automati~
`cally compute the transaction tax on the basis of the amount
`of the sales or service transacted, then prints these amounts
`on a receipt are very well known in the prior art. For
`example, such an electronic cash register is disclosed in US.
`Pat, No. 4,144,567.
`Thus, it has not proved difficult for the merchant to collect
`such transaction taxes from customers, particularly since
`customers have become used to this process. After collecting
`transaction taxes from the customer, the merchant is, in turn,
`obligated to turn these proceeds over to the taxing authority.
`Typically,
`this is done periodically (such as monthly or
`quarterly), with the merchant reporting total sales for the
`period, calculating the taxes due on the total sales, and
`remitting the calculated taxes to the taxing authority. Hence,
`this mode of collecting transaction taxes is heavily depen—
`dent upon the integrity of the individual provider of goods
`or services.
`
`Of course, many merchants keep scrupulous records and
`fully remit all taxes owing to the appropriate taxing author-
`ity. Unfortunately, others are not so scrupulous.
`It
`is a
`common practice for merchants to under-report their gross
`receipts; since the transaction tax is generally based on a
`percentage of gross receipts, under-reporting of gross
`receipts obviously diminishes the amount of tax. Thus,
`instead of all of the taxes collected from customers going to
`the public taxing authority, a certain percentage of it winds
`up in the pockets of merchants. Some of this tax pilferage
`originates from individual employees, such as sales clerks,
`but some of it also is committed by business owners,
`themselves.
`While it
`
`is ditlicult to know for certain the extent of
`
`3!]
`
`_
`
`4o
`
`45
`
`50
`
`55
`
`an
`
`under-reporting and under collection of transaction taxes,
`(cid:51)(cid:68)(cid:74)(cid:72)(cid:3)(cid:24)(cid:3)(cid:82)(cid:73)(cid:3)(cid:28)
`Page 5 of 9
`
`2
`some believe that as much as 30% or more of sales and
`service taxes owing state governments are never collected.
`Of course, this revenue shortfall leads to increased general
`levels of taxation in order to compensate for the shortfall.
`Thus, the customer who has dutifully paid a transaction tax
`to the merchant is doubly victimized when the merchant
`fails to transmit the collected tax to the state; the money
`which the state fails to collect cannot be spent for the public
`good, and the customer must pay higher taxes to compensate
`for the missing money. Tbus, the problem of under-reported
`and uncollected transaction taxes results in governmental
`debt and higher taxes.
`It would be desirable to have a tax reporting and collec-
`tion system which does not rely solely on the integrity of the
`individual merchant, but which takes transaction tax report—
`ing out of the merchant’s control.
`It would he further desirable if such a system provided for
`automatic monitoring and reporting of dollar amounts of
`transactions subject to tax, as well as the tax amounts due
`from each such transaction.
`
`It would be further desirable to provide such a system
`with the capabilities of automatically collecting the taxes
`owed, thus relieving the individual of considerable time and
`paperwork.
`
`SUMMARY OF THE INVENTION
`
`Disclosed and claimed herein is a system for automati~
`cally reporting taxable transactions to a central location. The
`central location can be the govemmentat taxing authority,
`itself, such as a state treasury department. However,
`in
`another embodiment, the central location will be a private
`service licensed by the state to perform such reporting
`andlor collecting activities.
`The present system relies on the electronic transmission
`of data which represents taxable transactions and the taxes
`generated thereby. For example, such data can be digitally
`transmitted over telephone lines, although other electronic
`data links could be used. The present system relies on such
`electronic transmission of data, as well as on electronic
`storage of data within memory storage devices, such as
`computer memories.
`To that end, the system includes a central computer which
`is disposed at a central location, such as a private service
`under contract from the taxing authority. The central com-
`puter includes a database which has a data file corresponding
`to each of a plurality of remote vendor locations. Typical
`remote vendor locations include wholesale and retail stores,
`restaurants, bars, hotels and motels, recreational centers and
`sports arenas, fast food outlets, professional service provid—
`ers such as a doctors', dentists’, or lawyers’ offices, beauty
`and barber shops, etc. The present system can also embrace
`remote vendor locations of a more transitory nature, such as
`craft shows, outdoor art shows, flea markets, etc., as will be
`explained in greater detail below.
`At least one point—of—sale, taxable transaction terminal is
`disposed at each remote vendor location. Of cou rse, in many
`cases, a remote vendor location will include many such
`terminals, such as a large department store or supermarket.
`Each taxable transaction terminal includes means for enter-
`
`ing a first numeric value representing each taxable transac-
`tion performed in connection with said terminal. For
`example, a taxable transaction terminal could be designed as
`a conventional electronic cash register and include a plural~
`ity of input keys for entering numeric values representing
`the goods and sales transactions being carried out on the
`terminal.
`
`

`

`3
`Each transaction terminal also includes means for enter-
`ing a second numeric value representing the tax due for each
`such taxable transaction occurrence. This second value is
`
`5,774,872
`
`4
`is then
`data transmitted by one point of sale terminal, it
`directed by the central computer to contact another point of
`sale terminal to initiate another data transmission routine,
`and so on until it has contacted all of its respective point of
`sale terminals, at which point it is ready to begin the rotation
`again.
`The data collected from the point of sale terminals in this
`fashion by the data collection sub-stations are,
`in turn,
`transmitted to the central computer. In other words, in this
`embodiment,
`the data collection sub-systems function as
`relay terminals in a data collection network. Since there are
`far fewer data collection sub-stations than point of sale
`terminals, two way, continuous electronic linkage between
`each data collection sub-station and the Central computer is
`possible via dedicated phone lines. Thus, each data collecA
`tion sub-station continuously transmits the data collected
`from the point of sale terminals on to the central computer
`as it
`is received by the data collection sub-stations.
`Alternatively, the system could provide for periodic, rotating
`communication between the central computer and the data
`collection sub-stations.
`
`The point of sale terminal disposed at each remote vendor
`location can take several forms. For example, it may be a
`specially provided stand alone terminal which includes a
`keyboard, a display screen, processor for calculating the
`appropriate tax on each transaction, some means of digital
`storage, such as semiconductor or magnetic memory, means
`such asa phone jack forlinkingthe terminal to the electronic
`netWork and, preferably, a printer for printing an authorized
`sales receipt to the customer. Such stand alone terminals
`may be specially designed and leased to each merchant, or
`it may be possible to adapt existing electronic cash registers
`to operate in the system. The terminal preferably includes a
`printer for generating an “official" tax receipt to the cus-
`tomer to help ensure merchant compliance.
`Altemalively, a point of sale terminal may simply be a
`personal computer (which already includes a keyboard,
`display means. processing unit, and memory) appropriately
`programmed to function in the present system. Such a
`“software only” terminal might be particularly useful at
`remote vendor locations which do not normally operate cash
`registers, but do use personal computers, such as,
`for
`example, medical, dental and other professional ofliccs.
`In a third embodiment of the point of sale terminal useful
`with the present system, the terminal is a self contained,
`portable unit. By appropriately downsizing the components,
`the portable terminal can be small enough to be hand held
`and, yet, contain input means, display, processor, and
`memory. Unlike the stand alone and software only terminals,
`the portable terminal will typically not be connected to the
`data network. It may be used in remote locations where such
`data connection would be impossible. However, the portable
`terminal is provided with a conventional telephone jack and
`may be connected to the network via a standard telephone.
`While the portable terminal alone cannot, of course, be
`automatically and periodically contacted by the data collec~
`tion sub-station as. is the case for the other types of terminals,
`it is possible to design the terminal, either by programming
`or hard wiring, so that it is functional only if connected to
`the network on a periodic basis to download data.
`The data collected by the central computer is stored in the
`appropriate data files. The central computer is programmed
`to analyze the collected data and provide, either on a
`periodic basis or upon request, various types of reports and
`summaries. For example, the central computer may generate
`for each merchant a periodic report reflecting the total value
`
`‘JI
`
`IU
`
`3!]
`
`based on the first value and rellects the applicable tax rate.
`Preferably,
`the terminal will automatically generate the
`second value and enter it
`internally. In other cases,
`the
`second value may be inputted like the first value. The
`terminal further includes means [or storing the first and
`second numeric values. In one embodiment of the system of
`the present invention, the storing means stores each first and
`second value separately for each transaction which has
`occurred on a particular transaction terminal. In a second
`embodiment, the storage means keeps a running tally of a
`total value of the transactions and the total calculated taxes
`that are generated on a particular terminal. Finally, each
`terminal also includes means for generating transmissible
`data representing the stored first and second numeric values,
`whether stored as individual transactions, or stored as sums.
`In one embodiment of the system of the present invention,
`the central computer is in communication with each taxable
`transaction terminal via an electronic data link connecting
`the two. The computer is programmed to interrogate each
`transaction terminal on a periodic basis. When so
`interrogated, each terminal
`is operative to generate the
`transmissible data concerning the transactions which have
`occurred on the terminal so that they can be transmitted via
`the electronic data link to the central processing unit. The
`central computer is further programmed to store such trans—
`mitted data in the appropriate data file for the particular
`remote vendor location at which the transaction terminal in
`question is located.
`However, due to the size ofa typical governmental taxing
`authority (such as a state government), the direct transmis-
`sion of data between each transaction terminal and the
`central computer may prove impractical. Thus, one alterna— _
`tive embodiment of the system of the present
`invention
`contemplates a plurality of data collection sub-stations inter-
`posed in the data stream tlowing between the point of sale
`terminals and the central computer. Each data collection
`sub-station services a portion of the plurality of point of sale
`terminals. Thus, rather than transferring data directly to the
`central computer, this portion of the plurality of point of sale
`terminals will instead transfer data to the associated data
`collection sub-station. The number of data collection sub-
`stations needed to operate the system will depend, of course,
`upon the total number of point of sale terminals, as well as
`on how many terminals a single data collection sub-station
`can service.
`
`4a
`
`45
`
`Each data collection substation is electronically linked
`(such as via telephone lines) with both the central computer
`and with each point of sale terminal. The data collection
`sub-stations of this embodiment of the present system are,
`preferably, under the control of the central computer. Thus,
`the central computer sends control signals via the data link
`to each data collection sub-station directing it to perform a
`data collection routine for each point of sale terminal. The
`data collection routine is performed for each point of sale
`terminal on a periodic, rotating basis. That is, the central
`computer directs each data collection sub-station to contact
`each point of sale terminal on a periodic basis (such as a
`daily or weekly. for example). When so contacted, the point
`of sale terminal downloads stored data concerning the sales
`totals and the calculated tax. In the embodiment in which
`
`50
`
`55
`
`an
`
`each point of sale terminal keeps track of these values as
`running totals, the transmission of the totals for each value
`to the data collection sub-station will take only a short period
`of time. When the data collection sub-station has received
`
`(cid:51)(cid:68)(cid:74)(cid:72)(cid:3)(cid:25)(cid:3)(cid:82)(cid:73)(cid:3)(cid:28)
`Page 6 of 9
`
`

`

`5,774,872
`
`5
`
`of transactions performed by the merchant and the total
`value of the transaction tax generated by the transactions
`during that period. When provided with such reports, the
`governmental taxing authority will then know exactly how
`much transaction tax is due from each merchant. The taxing
`authority can use this information to directly assess the tax
`due to each merchant, or can use it to verify the amounts
`actually sent by the merchant. In another embodiment, the
`system of the present invention further includes electronic
`data links to financial institutions to provide for the auto-
`matic collection of the taxes owing,
`thus considerably
`streamlining the collection process.
`The central computer can also generate a report for each
`merchant on a periodic basis, such reports again reflecting
`the total value of the transactions for the period as well as the
`tax generated thereby. Such information can be very useful
`to merchants who suspect theft by employees since these
`reported figures may be checked against the merchant’s own
`records.
`
`The central computer of the present system may also be
`used to generate non-compliance reporLs of a merchant
`whose tax payments do not match the accumulative totals
`for the tax reporting period. The automatic reporting and
`cross checking features of
`the present system virtually
`eliminate the problem of under-reporting and greatly aid the
`collection of taxes due.
`
`The system may also perform other functions, such as
`generating reports on taxes accrued, as well as taxes paid, a
`very useful feature for the taxing authority. Furthermore, the
`data collected and analyzed by the system may also be useful
`to other governmental
`institutions. For example,
`if the
`system of the present invention is employed as an automatic
`state sales tax reporting and collection system, the data may
`be very useful to the federal government for income tax
`collection purposes.
`
`BRIEF DESCRIPTION OF THE DRAWINGS
`
`The following detailed description is best understood by
`reference to the following drawings in which:
`FIG.
`1
`is a schematic, overall view of an automatic
`transaction tax reporting system according to the present
`invention;
`FIG. 2 is an overall, schematic view of the data collection
`network of the present invention;
`FIG. 3 is a detailed view of a portion ofthe data network
`of FIG. 2 illustrating difierent types of point of sale termi-
`nals; and
`
`FIG. 4 is a high level system flow chart illustrating the
`flow of data in the system of the present invention, with
`circles representing processing steps, open ended rectangles
`representing data stores. complete rectangles representing
`outside entities and arrows indicating the direction of data
`flow.
`
`DETAILED DESCRIPTION OF THE
`PREFERRED EMBODIMENTS
`
`‘JI
`
`Ill
`
`3!]
`
`4o
`
`45
`
`50
`
`55
`
`like
`the following detailed description,
`Throughout
`numerals are used to reference the same element of the
`
`fill
`
`present invention shown in multiple figures thereof. Refer-
`ring now to the drawings, and in particular to FIGS. 1 and
`2, there is shown schematically an automatic transaction tax
`reporting system 10 according to the present invention. The
`system is useful for the reporting and collection of any type
`of transaction tax, such as sales tax, service tax, value added
`tax, etc.
`In the ensuing description,
`the system It] finds
`(cid:51)(cid:68)(cid:74)(cid:72)(cid:3)(cid:26)(cid:3)(cid:82)(cid:73)(cid:3)(cid:28)
`Page 7 of 9
`
`6
`application as a state sale tax collection and reporting
`system. though it
`is to be understood that
`the described
`system is not limited to that particular application.
`The system 10 includes a central computer 12 which
`includes a processor and an associated data storage facility.
`Since the central computer 12 must process and analyze a
`great deal ofdata, it typically will be a main frame computer,
`although a network of smaller computers could also be
`utilized. The data storage facilities associated with the
`central computer 12 are correspondingly large. and may
`include any type of conventional data storage, such as
`semiconductor memory, magnetic memory, optical and
`magnetowoptical storage, etc., as well as any combinations
`thereof.
`
`The system It] further includes a plurality of point of sale
`terminals 16 disposed at a plurality of remote vendor loca-
`tions 14. Although FIG.
`1 depicts only one such remote
`vendor location 14 and one associated point of .sale terminal
`16,
`it
`is to be understood that
`the system of the present
`invention finds particular utility when at least one point of
`sale terminal 16 is disposed at every remote vendor location
`14 (such as stores, restaurants, sporting facilities, etc.)
`contained within thejurisdiction of the state taxing authority.
`In some cases, such as, for example, a large department
`store, a single remote vendor location 14 may require a large
`number of point of sale terminals 16, while in other cases,
`such as a convenience store, a single terminal 16 may be
`sufiicicnt.
`
`Each point of sale terminal 16 includes at least input
`means 18 (best seen in FIG. 3), such as a standard alpha-
`numeric keyboard t‘or the entry of numeric values represent-
`ing each transaction that has been performed in connection
`with the terminal 16. Each terminal 16 further includes
`electronic means 20 for storing the inputted data, calculating
`the sales tax due on each transaction, and storing the
`calculated values. Each terminal 16 may further include a
`display 21 (such as a VCR, LED, or LCD display), as well
`as a printer 22.
`As shown in FIG. 1, each remote vendor location 14 is
`linked via telephone lines 26 with the central computer 12.
`While such linkage may be direct, a preferred embodiment
`of the system 10 includes a data network 1? schematically
`illustrated in FIGS. 2 and 3. A plurality of data collection
`sub-stations 30 are provided for capturing data from various
`ones of the plurality of point of sale terminals 16 and
`retransmitting the collected data to the central terminal 12.
`As can most clearly be seen in FIG. 2, each data collection
`sub-station 30 is in electronic communication with a number
`of point of sale terminals 16 via first data lines 32. Similarly,
`the central computer 12 is linked electronically with each
`sub-station 30 via second data lines 34 which are, preferably,
`dedicated phone lines.
`FIG. 3 illustrates a portion of the network 17, in this case
`a single data collection sub-station 30 and a plurality of
`terminals 16A—16C. The terminals ISA—16C. illustrate some
`of the forms in which the point of sale terminal 16 may be
`provided. For example, 16A is a stand alone terminal, 163
`is a conventional personal computer programmed to func—
`tion as a point of sale terminal, and 16C is a portable unit.
`Each terminal
`l6A—16C is in telephonic communication
`with the data collection sub-station 30 via first data lines 32.
`
`Since the stand alone terminal 16A and the software only
`version 163 are intended for conventional, permanent
`locations, they may simply be connected to the data network
`17 via conventional phone lines. In the case of the portable
`unit 16, it must be periodically connected to the network 17
`via a conventional telephone 36.
`
`

`

`5,774,872
`
`7
`
`in the depicted
`The data collection sub-station 30,
`embodiment, serves as a data relay station.
`It is under the
`control of the central computer 12 via second data link 34.
`The central computer 12 sends control signals via the data
`link 34 to each data collection sub-station 30 which enable
`the sub—station 30 to perform its data collection function.
`Preferably, this data collection function is performed on each
`associated point of sale terminal 16 on a rotating, periodic
`basis. That is, data collection sub-station 30 will be contact
`a first terminal 16A and request that the sales transaction and
`tax data stored therein be transmitted via data link 32. After
`that data transmission is completed, sub-station 30 will then
`contact terminal 16B, and so on until data has been collected
`from all of terminals. 16 associated with a particular substa-
`tion 30. At that point, the sequence of terminal contact and
`data collection is begun again. Thus, the data collection
`sub-station 30 functions to turn a plurality of data streams
`periodically received from each terminal 16 into one con-
`tinuous data stream which is sent directly to the central
`computer. In this way, the data collection network 17 of the
`present system 10 offers a practical way to collect a vast
`amount of electronic data via conventional telephone lines.
`FIG. 4 illustrates in flow chart fashion, the flow of data in
`the system 10 of the present invention. Data [low is initiated
`at 100 when a sale is made to a customer 15. The numerical
`
`data concerning the price of the items sold at 100 is
`transferred at 200 to the point of sale terminal 16 by means
`of input means 18. The data concerning the amount of the
`sales transaction, as well as the tax due on the transaction
`calculated by the terminal 16, is stored in the terminal 16 in
`the form of data file 23. The sales transaction and tax data
`
`stored in data file 23 is periodically collected by the data
`collection network 17 at 300 and is stored in the consoli-
`dated iile 31. The consolidated data stored in 31 is then
`analyzed at 400 by central computer 12. The analyzed data
`may then be stored in a number of difl'erent data files, such
`as 28A (state sales tax data file), 2813 {merchant reports),
`28C (state tax reports), and 28D (non-compliance reports).
`‘l‘hese various data files 28A—281) may then be used by the
`system 10 to generate appropriate reports to be sent to the
`state governmental taxing authority 38, the merchant at the
`remote vendor location 14, or even to an outside govem-
`mental authority 42 such as the federal government.
`The central computer 12 may also be electrically linked to
`a financial institution 39, such as a bank or credit union,
`which is also electronically linked to the remote vendor
`location. The central computer 12 may also generate a report
`on a merchant which is automatically sent to the linancial
`institution 39. The amount rellecting transaction taxes col-
`lected by the merchant and owing to the state may be
`automatically transferred from financial institution 39 to the
`central computer 12, or, alternatively, directly to the state
`government 38.
`Preferably, point of sale terminal 16 is in communication
`with a printer 22, which is operative to print an official
`customer receipt 24 reflecting both the transaction and the
`tax. In addition, the receipt 24 may include special coding or
`design elements indicating it is an official tax receipt. Since
`the present system can operate to generate an official receipt
`for all taxable transactions, consumers will expect to receive
`a receipt from each transaction. Thus, if a customer does not
`receive the official receipt. the customer may suspect that the
`merchant, or an employee of the merchant, has not entered
`the transaction in the reporting system, either for the purpose
`of evading payment of the transaction tax, or because of
`outright thel't.
`It is contemplated that, when the system of the present
`invention is implemented within a taxing authority,
`the
`(cid:51)(cid:68)(cid:74)(cid:72)(cid:3)(cid:27)(cid:3)(cid:82)(cid:73)(cid:3)(cid:28)
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`appropriate governmental entity will pass the statutes and
`regulations necessary to ensure compliance. Such a legal
`mechanism preferably would include a system for receiving
`consumer reports of failure to receive an olficial tax receipt
`for a transaction. Thus, the ollicial receipt 24 can provide
`another level of compliance and ensure that merchants and
`their employees will not circumvent the system by failing to
`enter the appropriate information therein. Again, the system
`10 will provide advantageous to a merchant since it will help
`deter theft by employees, especially when compliance is
`enforced by the oilicial tax receipt 24.
`An automatic system for reporting andi’or collecting trans-
`action taxes has been described with regard to certain
`exemplilications and embodiment-3 thereof. Doubtless, hav-
`ing had the benellt ol‘ the teachings of the present invention,
`one of skill in the art might design variations in the disclosed
`system without departing the scope of the present invention.
`For example, three embodiments of the point of sale termi-
`nal have been described, but it is possible that other designs
`may prove advantageous in certain circumstances. For
`example, rather than having a keyboard type of input, the
`tenninal could include a scanner which would scan in
`receipts and register tapes generated by existing cash reg-
`isters for subsequent storage within the terminal and even-
`tual transmission as described previously. Furthermore, it is
`highly likely that certain existing electronic and computer-
`ized cash registers might be easily adapted to operate as
`point of sale terminals according to the present system
`without the necessity of providing a separate terminal and
`requiring a separate act of data entry. Furthermore, rather
`than each point of sale terminal being separately linked to a
`data reporting sub-station,
`it may prove advantageous in
`certain circumstances to network together a plurality of such
`terminals located in a single remote vendor location, with a
`single data link serving to connect the sub-station with the
`network of individual terminals. Also, while one interme-
`diate level ol'data reporting sub-stations has been disclosed,
`it is possible that, especially in larger taxing authorities, a
`more complicated network may be required with additional
`intermediate levels of data collection devices. However,
`such varia