The Federation of Tax Administrators (FTA) has adopted a “10 Point Plan” to curb tobacco tax evasion. Point 6 is, “Utilize uniform electronic reporting standards for tobacco information”.
The Technology Sub-committee facilitates and encourages all tax authorities: federal, state/provincial and local, and taxpayers alike, to comply with this point.
Electronic data interchange (EDI) is the structured transmission of data between organizations by electronic means, which is used to transfer electronic documents or business data from one computer system to another computer system, i.e. from one trading partner to another trading partner without human intervention.
EDI is made up of many different methods of sharing data electronically between parties. The FTA has developed standards for the tax authority to follow when implementing electronic data interchange (EDI).
The committee has adopted XML as the standard for such reporting. The XML schema standard is included in this guide. It has also incorporated into such standards the various codes adopted for reporting product type, entity identification, as well as specific tobacco tax information.
The Technology Sub-committee is the custodian of the codes and the chair is the contact person for anyone wishing to add to the list of approved codes.
Currently, a number of states have plans for mandatory or voluntary electronic reporting programs for tobacco taxes. Obviously, the more uniform the methods employed in such reporting, the better it is for all taxpayers and tax authorities involved. Besides making tax reporting more efficient, uniformity in methods and standards also facilitates the sharing of the detailed information contained in the tax reports among tax authorities, and it enables taxpayers to better respond to tax authority requirements for information.
The Tobacco Uniformity Committee recommends that state tax administrators adopt a standard internet interface for tobacco taxpayers. The standard interface is included in this guide.
A listing of active work groups and the leadership of this sub-committee can be found on the next few pages.