Section 125-103-3 - Recordkeeping requirements-machine-sensible records1.General requirementsA. Machine-sensible records used to establish tax compliance must contain sufficient transaction-level detail information so that the details underlying the machine-sensible records can be identified and made available to the Assessor upon request. A taxpayer may discard duplicated records and redundant information provided that the taxpayer's responsibilities under this rule are met.B. At the time of an audit, the retained records must be capable of being retrieved and converted to a standard record format.2. Electronic data interchange requirements A. If a taxpayer uses electronic data interchange processes and technology, the level of record detail, in combination with other records related to the transactions, must be equivalent to that contained in a paper record that conforms to the requirements of 36 M.R.S. §135 and this rule. For example, the retained records should contain such information as vendor name, invoice date, product description, quantity purchased, price, amount of tax, indication of tax status, shipping detail, etc. Codes may be used to identify some or all of the data elements, provided that the taxpayer provides a method that allows the Assessor to interpret the coded information.B. The taxpayer may capture the information necessary to satisfy paragraph A above at any level within its accounting system and need not retain the original EDI transaction records if the taxpayer can establish the audit trail, authenticity, and integrity of the retained records. Example: A taxpayer using electronic data interchange technology receives electronic invoices from its suppliers. The taxpayer retains the invoice data from completed and verified EDI transactions in its accounts payable system rather than retaining the EDI transactions themselves. Since neither the EDI transaction nor the accounts payable system captures information from the invoice pertaining to product description and vendor name (i.e., they contain only codes for that information), the taxpayer also retains other records, such as its vendor master file and product code description lists and makes them available to the Assessor. Thus, this taxpayer need not retain its EDI transaction for tax purposes.
3.Electronic data processing system requirements. The requirements for an electronic data processing accounting system are similar to those for a manual accounting system, in that an adequately designed accounting system incorporates methods and records that will satisfy the requirements of this rule.4.Business process informationA. Upon the request of the Assessor, the taxpayer must provide a written description of the business process that created the retained records. This description must include the relationship between the records and the tax documents prepared by the taxpayer and the measures employed to ensure the integrity of there cords.B. The taxpayer must be able to demon strate: (1) the functions being performed as they relate to the flow of data through the system;(2) the internal controls used to ensure accurate and reliable processing, and(3) the internal controls used to prevent unauthorized addition, alteration, or deletion of retained records.C. The taxpayer must maintain the following specific documentation for machine-sensible records retained pursuant to this rule:(1) record formats or layouts;(2) field definitions (including the meaning of all codes used to represent information);(3) file descriptions (e.g., data set name); and(4) detailed charts of accounts and account descriptions.18-125 C.M.R. ch. 103, § 3