INDIANAPOLIS – Hoosiers still have to pay taxes but Gov. Eric Holcomb's administration is trying to make the process a little less painful.
The Indiana Department of Revenue is set to deploy the first of a four-phase rollout Sept. 3, while another state agency is diving into a separate technology upgrade that could help counties and townships.
“This is long overdue. Our legacy system has been in place for 25 years,” said revenue Commissioner Adam Krupp.
The revenue modernization project has been in the works several years, and will give Hoosiers a state-of-the-art technology system to file tax returns, make payments, and view and manage business and individual tax accounts.
The cost is $60.2 million. The state selected FAST Enterprises, LLC, as its vendor – which has worked with more than 25 other states on similar projects.
Krupp said about 88% of taxpayers file online. But beyond that, there is no portal for taxpayers to communicate with the revenue department.
That's where INTime comes in – the Indiana Taxpayer Information Management Engine – an e-services portal with all kinds of new functionality.
The project will be unveiled in four phases – corporate taxes, sales and withholding taxes, individual taxes and special taxes.
Krupp said the measured roll-out allows adjustments to be made quickly and doesn't overwhelm the system. In all, the state processes 3.5 million tax returns and deals with 65 tax types.
The corporate phase kicks in Sept. 3 and will impact between 250,000 to 300,000 taxpayers.
All taxpayers will be able to register online, view their tax liabilities, pay their bill and view and send correspondence from and to the department of revenue.
Kevin Gulley, chief information officer for the department, said one big new feature allows a business's certified public accountant or power of attorney to also register and access the accounts. He said sometimes an accountant doesn't know about a notice sent to a business until too late. This way, they will get notification as well and be able to act quickly.
“They think it's a game-changer,” Krupp said of tax professionals who are being introduced by the department to the system.
Krupp said when the department sends a notice, an action alert will show the taxpayer it needs to be addressed. And because it's the state's system, the taxpayer doesn't have to wonder if it's from an outside scammer.
Gulley said the state went through a comprehensive security certification to ensure the safety of the system.
He said two-factor authentication will be used – such as sending a code to the taxpayer's cellphone.
The second phase will impact local food and beverage and innkeeper's receipts as well as the sales tax withholding that most retailers use. Its target date is September 2020.
One helpful tool will be that local county officials will be able to track food and beverage and innkeeper taxes directly rather than asking the department to run a special report. Historic information will also be at their fingertips.
The largest phase – targeted for September 2021 – is individual income tax filings – about 3.2 million returns.
Individual tax filers will be able to amend a previous tax return electronically rather than using paper. There are about 60,000 amendments per year.
The last phase is a small number of specialty taxes in September 2022. Then there is a 10-year maintenance contract costing the state $17.5 million.
Krupp noted that using the system is voluntary. While job duties will likely change, the department doesn't expect any positions will be cut.
“We think most people will take advantage of this because of the innovative approach to interacting with our agency,” Krupp said.
The Department of Revenue isn't the only agency looking to ease the tax burden. The Indiana Department of Local Government Finance just received funding from lawmakers for two smaller, separate projects aiding county and township offices.
The first will for the first time allow businesses around the state to file business personal property taxes online. Now businesses have to count their computers, machinery, tractors and other property and hand file paperwork with individual counties.
Local Government Finance Commissioner Wesley Bennett said he has seen stacks and stacks of papers on county clerk desks of nothing but business personal property tax returns.
“Gov. Holcomb asked every agency what we can do better to be more taxpayer friendly and efficient,” he said.
The state has more than 300,000 personal property tax filers and Bennett expects businesses to take advantage of the new system, which will allow them to easily pull data from previous years.
“This could have a substantial impact on local county offices helping them be more efficient with their limited resources,” Bennett said.
The whole project will cost $3 million. Bids are being sought and a contract should be awarded by the end of September. The goal is to have it up and running by January 2021.
The department of local government finance is also starting a $250,000 pilot program to allow citizens to apply online for township assistance. Hoosiers currently must complete cumbersome paper applications at local offices. The hope is to handle it all electronically.
More than 150,000 citizens annually receive township aid – to help with housing, food or utility bills. Some townships have seen abuses and an online system could help curb that. Overall, more than $21 million is spent.
Neither the pilot townships nor a deadline have been determined.