Subject: Revenue Dept; Taxation and Revenue - General; Taxation and Revenue - Income; Taxation and Revenue - Sales and Use

Bill Summary: Would allow the Director of Revenue to require certain tax returns be filed electronically.

ESTIMATED NET EFFECT ON GENERAL REVENUE FUND
FUND AFFECTED	FY 2009	FY 2010	FY 2011
General Revenue *	$0 or Unknown	$0 or Unknown	$0 or Unknown

Total Estimated Net Effect on General Revenue Fund *	$0 or Unknown	$0 or Unknown	$0 or Unknown

ESTIMATED NET EFFECT ON OTHER STATE FUNDS
FUND AFFECTED	FY 2009	FY 2010	FY 2011


Total Estimated Net Effect on Other State Funds	$0	$0	$0

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 2009	FY 2010	FY 2011


Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)
FUND AFFECTED	FY 2009	FY 2010	FY 2011


Total Estimated Net Effect on FTE	0	0	0

☐ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).

☐ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 2009	FY 2010	FY 2011
Local Government	$0	$0	$0

Officials from the Office of Administration, Division of Budget and Planning (BAP) assume this proposal would not result in additional costs or savings to the Division of Budget and Planning. This proposal would allow the Director of Revenue to require electronic filing of returns for income, motor fuel, sales, and withholding taxes. The Department of Revenue should provide the estimate of possible savings or increased costs as a result of this proposal.

Officials from the Department of Revenue (DOR) assume this proposal would have no fiscal impact on their organization.

In response to a similar proposal in a prior session (SB 1138, LR 5151-01, 2006) DOR assumed that notification would need to be sent to the impacted taxpayers if/when the director requires electronic filing of withholding tax returns. DOR stated that the proposal could reduce the FTE needed for pre-edit of returns, and could also reduce the cost of printing and mailing returns, the cost of depositing paper checks, and the cost of manually keying returns.

Forms costs could be reduced, depending on how many returns are mandated to file electronically. For FY 2006, there were 789,002 forms printed by vendors at a cost of $195,352 (not including postage). There were 1,363,700 forms printed by state printing in 2005 for a cost of $62,725.

DOR stated that the increase in electronically filed returns would increase the number of registrants for Automated Clearing House transactions requiring a taxpayer to complete, and DOR to process, a trading partner agreement. However, the need for additional FTE in this area could be offset by the reduction of FTE needs in other areas.

Oversight will estimate the impact of this proposal as $0 or a positive unknown since the language would permit DOR to implement electronic processing for certain returns.

This proposal could impact small businesses involved in tax return preparation, as well as small businesses which could be required to file certain tax returns electronically.

This proposal would allow the Department of Revenue to implement electronic filing requirements for certain tax returns and tax return preparers.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

FISCAL IMPACT - State Government	FY 2009 (10 Mo.)	FY 2010	FY 2011
GENERAL REVENUE FUND

Savings - Department of Revenue
Forms, Postage, Personal Service, etc. from implementation of electronic filing requirement. *	$0 or Unknown	$0 or Unknown	$0 or Unknown

ESTIMATED NET EFFECT TO THE GENERAL REVENUE FUND *	$0 or Unknown	$0 or Unknown	$0 or Unknown
* Could exceed $100,000.