Massachusetts:Massachusetts:E-Government InitiativesE-Government Initiatives

Frederick A. LaskeyFrederick A. LaskeyCommissionerCommissioner

Electronic FilingElectronic Filingfor Individual Taxpayersfor Individual Taxpayers

Practitioner

E-File

Practitioner

E-File

19931993

TelefileTelefile

19951995

PC FilePC File

19951995

Online FilingOnline Filing

19981998

TelefileTelefile

398,000

172,000

404,000428,000 421,500

428,000

0

100,000

200,000

300,000

400,000

500,000

1995 1996 1997 1998 1999 2000Projected

Filing income taxes over touch-tone phoneFiling income taxes over touch-tone phone8-minute call 4-day refund turnaround8-minute call 4-day refund turnaround

Practitioner E-FilePractitioner E-FileUp 37% over 1999Up 37% over 1999

2,800

304,000

222,500185,000

103,00080,000

51,00055,000

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

1993 1994 1995 1996 1997 1998 1999 2000Projected

Practitioners use commercial software to Practitioners use commercial software to electronically file returns on behalf of taxpayerselectronically file returns on behalf of taxpayers

PC FilePC File Up 48% over 1999Up 48% over 1999

27,000

11,000

40,000

5,000

0

10,000

20,000

30,000

40,000

50,000

1997 1998 1999 2000 Projected

Taxpayers use DOR’s free PC File software to Taxpayers use DOR’s free PC File software to prepare and file their state returnprepare and file their state return

Online FilingOnline FilingHas QUADRUPLED since 1999Has QUADRUPLED since 1999

10,000

44,000

0

10,000

20,000

30,000

40,000

50,000

1999 2000 Projected

Taxpayers use commercial web sites or software to Taxpayers use commercial web sites or software to electronically file their state income tax returnelectronically file their state income tax return

E-Filing OverallE-Filing OverallHas nearly QUADRUPLED since 1995Has nearly QUADRUPLED since 1995

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1995 1996 1997 1998 1999 2000Projected

Telefile Practitioner E-File PC File Online Filing

222,000

478,000512,000

625,500681,000

816,000

Refunds Issued by Refunds Issued by Direct DepositDirect DepositUp 16% over 1999Up 16% over 1999

0

50,000

100,000

150,000

200,000

250,000

1996 1997 1998 1999 2000Projected

230,000

198,084

99,456

15,000

Credit Card PaymentsCredit Card PaymentsUp 65% over 1999Up 65% over 1999

$2.80

$0.62$0.92

$1.70

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

1996 1997 1998 1999 2000Projected

$ Millions

E-Government means better E-Government means better service to taxpayers…service to taxpayers…

...Refunds issued 43% faster since 1996...Refunds issued 43% faster since 1996

Refund turnaround (days) , 1996-2000Refund turnaround (days) , 1996-2000

17.5

17

15.2

13.5

10

0 6 12 18 24

1996

1997

1998

1999

2000 Projected

……And calls answered 84% faster And calls answered 84% faster since 1996 since 1996

43

34

16

117

0

5

10

15

20

25

30

35

40

45

50

1996 1997 1998 1999 2000

Call answer times in seconds, 1996-2000Call answer times in seconds, 1996-2000

However ... Income Tax Returns However ... Income Tax Returns are only a Portion of the Workload are only a Portion of the Workload

77%

23%

All Business Tax Returns and Filings

Income Tax Returns

What about business What about business taxpayers?taxpayers?

EFT Payments Since FY93EFT Payments Since FY93 (In Billions)(In Billions)

$0.04$0.60

$1.70

$3.80

$5.00

$5.90$6.50

$7.00

$0

$1

$2

$3

$4

$5

$6

$7

$8

1993 1994 1995 1996 1997 1998 1999 2000Proj.

Introducing…Introducing…

TheThe Bay State Business Bay State Business ConnectionConnection

baystatebiz.combaystatebiz.com

.

99999999999

.

40,000 Business 40,000 Business Registrations AnnuallyRegistrations Annually

0

10,000

20,000

30,000

40,000 Registrations

40,000

50,000

2.2 Million Sales and 2.2 Million Sales and Withholding Returns Withholding Returns

Filed AnnuallyFiled Annually

0

.5

1.0

1.5

2.0

Millions

2.5 2.2 Million

Ingredients for SuccessIngredients for Success

Future success will hinge on 3 key Future success will hinge on 3 key ingredients:ingredients:

• Increased interactivityIncreased interactivity

• Customer focusCustomer focus

• Marketing, marketing, marketingMarketing, marketing, marketing

Timeline for EnhancementsTimeline for Enhancements

March 2000

• Online business registration

• Downloadable sales and withholding software

• Information, survey, e-mail support

Timeline for EnhancementsTimeline for Enhancements

March 2000

May2000

• Online new hire reporting

Timeline for EnhancementsTimeline for Enhancements

March 2000

May2000

January2001

• Sales, Meals and Room Occupancy Web filing

• E-File for corporations and partnerships

• Corporate and individual estimated Web payments

Timeline for EnhancementsTimeline for Enhancements

March 2000

May2000

January2001

September 2001

Single File:Single File:

• Withholding, unemployment, wage reporting, in oneone quarterly form

• Wage reporting: Web form for small employers, FTP for large employers

WithholdingWithholding

Wage ReportingWage Reporting

Unemployment InsuranceUnemployment Insurance

SINGLE FILESINGLE FILE

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

Annual Number of Filings

Single File

Withholding

Unemployment Insurance

Wage Reporting

Massachusetts has 179,000 employers.They file about 3 million returns annually.

1.56 M

2.99 M

716 K

With SINGLE FILESINGLE FILE that number will plummet to 716,000.716,000.

716 K

716 K

Single FileSingle File

Single FileSingle File

What’s Needed:What’s Needed:

• Combined database of employers (Department of Revenue & Department of Employment and Training)

• Legislation to change filing due dates

• Promote EFT for all businesses

Single FileSingle File

What are the benefits:What are the benefits:

• Up to 76% reduction in returns filed

• File 1 return for 3 requirements

• Deal with 1 agency for 3 requirements

The EndThe End