The Tax Payment (TXP) Banking Convention was prepared by the Banker's EDI Council of the National Automated Clearing House Association (NACHA), in cooperation with the Federation of Tax Administrators (FTA) and the Committee on State Taxation (COST). The Tax Payment Banking Convention was approved by the Banker's EDI Council on March 7, 1990. This document is available separately or as a section of the Council's Banking Conventions and Implementation Guidelines manual. The TXP formatting is mandatory, not optional; it should not be altered.
Since it is expected that the addenda record will also carry approved conventions for other industries, the first requirement in the record/segment is an identifier. The Tax Payment Convention will be identified by the characters TXP. One to fifteen characters have been provided for a taxpayer identification number and one to six characters have been provided to accommodate a taxpayer verification. This check may consist of the leading characters of a taxpayer's name or possibly a uniquely assigned code. In either case, this represents a control check that will be assigned by the state if the field is used. Tax Type Code is a one to five character field which will allow the taxpayer to identify which tax is being paid. The FTA has drafted a master code table to facilitate consistency and sharing among the states. Tax Period End Date would provide the necessary information to identify what time period the payment covers. Consensus is that the tax due date is information which can be derived from knowing which tax is being paid and what period is covered by the payment.
Provision has been made for three amount fields. An Amount Type Code will permit identification of the amount that follows. In this manner, multiple scenarios can be addressed with one convention. One such scenario may be the designation of tax, penalty, and interest with the total payment found in the CCD+ Batch Header Record or by summing the three different amounts. Another scenario may be the designation of State vs. City vs. Local Tax to allow allocation for tax due individual jurisdictions. Furthermore, by designating these as optional fields, it will be possible to pay just one amount (i.e., tax) without incurring the overhead of sending two empty ($0) amount fields (i.e., penalty or interest ). For cross-footing, the total of these three amount fields may be compared to the payment amount in the CCD+ "06" Record in the case where the amount refers to actual remittance. Amount fields are two to ten numeric characters with cents always required (if the field is used at all). The Amount Type Code field is a one character field. A master code list is maintained by the FTA.
The requirements expressed for the CCD+ Special Addenda are also applicable to the ANSI X12 Payment Order/Remittance Advice Transaction. However, one additional requirement has emerged. This requirement is the capability to pay multiple tax types with a single tax payment. Through Looping Constructs, the "820" Transaction can accommodate the payment of one or more taxes with a single payment.
X12F will provide a mapping and implementation guide for the translation of the "820" into the CCD+ and vice-versa. It is expected that until the state revenue departments can become EDI ready, a taxpayer wishing to originate an "820" instead of a CCD+ with the Tax Payment Convention would negotiate with its fiscal agent (originating bank) to accept its "820" and translate it into one or more CCD+ transactions. A second alternative would be for the taxpayer's fiscal agent to envelop the "820" in a CTX transaction and for the state's fiscal agent to receive the CTX and translate the "820" portion into the convention carried in the CCD+. A third alternative would be for the taxpayer or the state to contract with a third party to receive paper, phone calls or "820s" and translate them into formats which can be carried through the clearing houses and the Federal Reserve or delivered from the third party directly to the state's revenue department with an accompanying funds movement. The second alternative would of course require that many more banks implement the ability to originate and receive CTX transactions.
Segment Identifier TXP 3 alphanumeric
Separator * 1 character
Taxpayer Identification XXXXXXXXXXXXXXX 1 to 15 alphanumeric
Separator * 1 character
Tax Type Code XXXXX 1 to 5 alphanumeric
Separator * 1 character
Tax Period End Date YYMMDD 6 numeric date
Separator * 1 character
Amount Type Code X 1 alphanumeric
Separator * 1 character
Amount $$$$$$$$cc 2 to 10 numeric
Separator * 1 character
Amount Type Code X 1 alphanumeric Optional
Separator * 1 character
Amount $$$$$$$$cc 2 to 10 numeric Optional
Separator * 1 character
Amount Type Code X 1 alphanumeric Optional
Separator * 1 character
Amount $$$$$$$$cc 2 to 10 numeric Optional
Separator * 1 character
Taxpayer Verification XXXXXX 1 to 6 alphanumeric Optional
Segment Terminator \ 1 character
\ 79 characters maximum
Segment Identifier serves as the name of the segment. The identifier occupies the first three character positions of the segment and for the Tax Payment Convention it consists of the upper case letters -- TXP.
Separator denotes the end of each component or data element in the convention. An asterisk (*) is used as the separator.
Taxpayer Identification is the taxpayer's identification or registration number as assigned by the state taxing authority.
Tax Period End Date is used to provide the necessary information to identify the time period covered by the payment. From knowledge of the tax being paid and the tax period end date, the due date and other relevant matters can be determined. The tax period end date will be six characters in the YYMMDD format.
Tax Type Code identifies the type of tax being paid. The tax type code is a 1 to 5 character field which will allow the taxpayer to identify which tax is being paid. The FTA has drafted a master code table to facilitate consistency and sharing among the states.
Amount Type Code identifies the type of payment or amount which follows. The FTA has drafted a master code table to facilitate consistency and sharing among the states.
Amount fields are used to carry the dollar amount(s) being paid. Only one amount field is required; the other two are conditional depending on the state and the type of tax(es) being paid. The amount field must always contain cents (cc). Decimal points are not included. The last two digits will be read as the "cents."
Taxpayer Verification is a one to six character field to permit verification the use of which is optional to each state. It will be used to assist in insuring that the taxpayer identification number and other identifying information are correct. It may be the first four characters of the taxpayer's name or a six character access code or other verification scheme drafted by the state.
Segment Terminator is used to terminate the segment or the record. A backslash (\) serves as the segment terminator.
Three examples of alternative uses of the format follow:
One: All fields used Two: No Optionals Three: Two Optionals
Full Length Fields Shortened Fields Full Length Fields
Tax Type Shortened
TXP TXP TXP
* * *
123456789012345 12345678901 123456789012345
* * *
041 011 04101
* * *
890331 890331 890331
* * *
T T S
* * *
1221210050 1210050 1221210050
* \ *
P L
* *
1000050000 1000050000
* *
I *
* *
1000036000 123456
* \
JOHNST
\
77 characters 37 characters 68 characters
Sales & Use Tax Pmt. Withholding Tax Pmt. Sales & Use Tax Pmt.
Tax, Penalty & Interest Tax Only Pre-payment #1
State & Local
Note: A separator (*) must be used to designate that an optional field has been skipped when that field is followed by data. Refer to Examples #2 and #3.
In Example #2, the terminator (\) follows immediately after the amount since all optional fields following the amount were dropped.
In Example #3, separators (*) must identify the skipped Amount Type Code and Amount since the Taxpayer Verificiation field was used.