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Level 3 data is particularly comprehensive and is used primarily in business-to-business (B2B) transactions. It captures detailed transaction information, including specific tax types and rates that apply, which is critical for accurate reporting and compliance in financial transactions. This level of detail assists organizations in understanding their transactional expenses and managing tax liabilities effectively.
In contrast, Level 2 data is not as extensive and generally includes less detailed information, focusing more on payment amounts and some transaction identifiers. Level 3 data goes further by also including line-item details such as product codes, which help businesses to track inventory effectively and provide clearer insights into purchasing behaviors.
Thus, the accuracy and comprehensiveness of Level 3 data make it essential for entities that require detailed reporting and analysis of their transactions, providing a robust framework for handling tax and compliance needs.