GovOne acquires Taxware

GovOne Solutions LP, a provider of government electronic payment services,

announced Aug. 1 that it will acquire the assets of Taxware International

Inc., a provider of worldwide commercial tax compliance systems.

A central component of govOne Solutions' growth strategy is to fully

automate the electronic payment services that it provides to its government

and financial institution clients.

The acquisition of Taxware's automated solution adds tax calculation

to govOne's offerings, thus simplifying the entire transaction chain, including

form preparation, payment processing and post-transaction support, said

Jim Fox, chief executive officer of govOne Solutions.

GovOne Solutions' government payments projects serve more than 2 million

taxpaying businesses and process 40 million payments valued at $1 trillion

annually, said Garen Staglin, president and CEO of eOne Global LP, which

owns govOne.

Also, through its relationship with Bank of America, govOne processes

tax payments for the Internal Revenue Service using the Electronic Federal

Tax Payment System. EFTPS serves 1.5 million taxpaying businesses from the

southern United States and handles transactions worth more than $800 billion

annually.

Taxware's automated tax compliance systems have modules for a variety

of tax types, including sales, user, Internet and international taxation,

said Dan Sullivan, CEO and founder of Taxware.

Taxware also is involved in the Streamlined Sales Tax Project (SSTP),

which aims to establish a simplified method for calculating and filing state

and local taxes online. There are more than 7,000 state and local taxing

jurisdictions in the United States, many of which are missing out on collecting

taxes on sales transacted via the Internet, telephone or mail.

A congressionally mandated moratorium currently bars imposing sales

tax on electronic commerce.

The SSTP program is being piloted in four states: North Carolina, Wisconsin,

Kansas and Michigan, Sullivan said. Taxware has been awarded two of the

four system contracts related to the SSTP pilot and will serve as an application

service provider in those deals.

"States recognize that they are losing revenue because they can't tax

interstate transactions if the business doesn't have a nexus in a jurisdiction,"

Sullivan said. "They want to test this concept to see if it works...and

another 17 states have passed legislation to join as we go forward. If Congress

acts, SSTP will revolutionize the sales tax system in the U.S."

Under the terms of the agreement, govOne Solutions will acquire the

assets of Salem, Mass.-based Taxware for $32 million in cash and an equity

interest in govOne Solutions. About 150 employees of Taxware will become

employees of govOne Solutions. The deal is expected to close within 30 days.

Taxware will operate as a division of govOne Solutions, and Sullivan

will continue to be involved in the management of the company.

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