Iowa

1
Iowas E-File Success Story

• Paul E. Benson
• Taxpayer Services Manager
• MSATA 2006

2
Business eFile Pay Overview

• Why did we consider eFile Pay?
• Past success with E-Filing of individual income
  tax returns
• Beneficial to taxpayers and department
• We saw the potential in expanding
• Wanted voluntary compliance

3
Business eFile Pay Overview

• Questions asked included
• How to simplify tax filings and collections
• How to create efficiencies within Revenue
• How to change the way we transact business
• These questions resulted in a 3 year study which
  generated even more questions

4
Business eFile Pay Overview

• Questions from the E-Commerce study
• How do we market our service?
• How do we educate our customers?
• How will we answer their questions?
• How do we convince them to use eFile Pay?
• Will the users, and the department, accept the
  change?
• The decision was made to move forward.

5
Business eFile Pay Overview

• eFile Pay required department changes.
• Resources were investigated obtained
• Shifts in the budget were negotiated
• Marketing educational strategies were developed
• A new unit was formed trained
• All of this occurred while the former filing
  process remained in place

6
Business eFile Pay Overview

• This overview will describe the strategies that
  were developed and implemented, including
• Creation of the new eFile Service Unit
• Benefits realized by businesses - and us
• Marketing education initiatives
• Use of incentives not mandates

7
Why Not Mandate?

• Factors considered
• What would be acceptable to customers?
• Wanted cooperation, not a mandate
• What would policy makers want?
• No real pressure from legislature
• Our success with income tax E-Filing
• Estimate 67 participation rate this year
• Experiences of other states

8
Why Not Mandate?

• Decision was made against mandating
• No penalties at this time
• No returns mailed to permit holders
• Payment vouchers are mailed
• Withholding quarterly returns Web site only
• Sales Use quarterly returns Web site only

9
Implementation

• Timeline developed
• Withholding tax in January 2005
• Sales Retailers Use tax in July 2005
• Consumers Use tax in October 2005
• Withholding VSPs in January 2006
• LPG in March 2006
• Motor Fuel in July 2006

10
eFile Service Unit

• A new unit was needed.
• Decided to place it in Taxpayer Services
• Education assistance would be the emphasis
• Unit could evolve into other areas in the future
• Program Manager hired in August 2004
• Rest of the unit hired in November 2004
• Training occurred until January 2005

11
eFile Service Unit

• Duties of this unit would be
• Answer phone calls
• Respond to emails
• Help walk-in customers
• Help with testing and system development
• Input on letters, emails, Web site, etc.

12
eFile Service Unit

• All new employees eliminated the risk of
  reducing current level of customer service.
• Originally had 1 manager, 4 full time plus 6
  temporary employees.
• Also added 4 full time backups and 13 emergency
  backups when needed
• Wanted adequate phone coverage 1st year

13
eFile Service Unit

• The temporary employees were originally hired to
  work the first year while call volume would be
  high.
• Two of them worked for 18 months
• This would leave a permanent staff capable of
  handling the level of service needed in the
  future.

14
eFile Service Unit

• Currently eSU consists of
• 1 Program Manager
• 1 Taxpayer Service Specialist
• 6 Administrative Assistants
• 4 emergency backups
• We hope to eliminate the backups soon and rely on
  a permanent staff of 8 or 9.

15
Marketing Education

• We needed to market promote.
• It would need to be a department wide effort
• Who do we target?
• How do we get the message to them?
• How do we educate the businesses?
• What can we do to make this transition as simple
  as possible?

16
Marketing Education

• eFile Governance Team was formed.
• The team would oversee the program
• Consisted of the Director and managers from most
  department divisions
• Marketing and education plans were developed

17
Marketing Education

• Mailings
• First attempt to communicate with businesses
• Letters sent out 2 months before each tax type
  went live in eFile Pay
• Withholding letters sent in November 2004
• Sales/Use letters sent in May 2005

18
Marketing Education

• Press Conferences
• Given by the Director of Revenue to alert media
  the month before each tax went live
• TV stations newspapers picked up the story
• Withholding tax in December 2004
• Sales/Use tax in June 2005

19
Marketing Education

• BEN Letters
• Business E-file Number
• Number used to access eFile Pay
• Each business has 1 BEN for all tax types
• Letter also provided information on accessing the
  system, use of the BEN and how to complete their
  returns electronically
• Actual Web site screen shots were included

20
Marketing Education

• Telephone Scripts
• Developed for businesses that elected to transmit
  by telephone
• Scripts detailed each step of the process
• Feedback from the scripts has been positive
• Provide 18 different phone scripts
• 8 for withholding tax
• 10 for sales use taxes

21
Marketing Education

• Presentations
• Offered statewide over a two week period
• Postcards with dates times mailed to each
  withholding agent and sales tax permit holder
• Done when majority of businesses would be using
  the system for the first time
• 5 Field Taxpayer Service Specialists presented
• 70 presentations with 4,400 in attendance

22
Marketing Education

• eLists
• Department has 7 different eLists
• Use as a communication tool
• eLists were used 15 times to send out information
  regarding eFile Pay
• Sent to taxpayers, practitioners government
  entities

23
Marketing Education

• Reminder Letters
• Mailed to selective businesses
• Sent as the quarterly due date drew near
• Targeted to businesses that had not yet accessed
  the eFile Pay system

24
Marketing Education

• Web site
• Enhanced to offer as much info as possible
• Copies of all correspondence (BEN, reminder)
• All eFile Pay presentations (pdf format)
• PowerPoints showing the screen shots
• FAQs
• Other miscellaneous items
• Pay options, browser info, due dates, holidays

25
Marketing Education

• Summary
• 70 presentations to 4,400 participants
• 2 postcard mailings
• 2 press conferences articles to the media
• 15 eLists sent
• 21 letters generated
• 12 online PowerPoint presentations
• Expanded Web site with 30 files of eFile Pay
  info

26
Results

• Methods of using eFile Pay
• 90 of businesses use Web application
• Remaining 10 use the telephone
• We anticipate continued Web growth
• Telephone option will always be necessary
• Application down
• Business PC down
• Business has no Web access

27
Results

• Electronic Payments
• Over 80 of total money received is sent
  electronically
• Only about 50 of the transactions are electronic
• These percents will increase as businesses become
  more comfortable using the eFile Pay system

28
Results

• Three major concerns were answered
• Receipts remain steady timely
• Hasnt been an issue
• Delinquency rates
• They are actually lower
• Quality of information is consistent
• Especially important regarding the local option
  sales taxes that are reported

29
Results

• Benefits to the department
• Thousands of returns are no longer processed
  manually
• Electronic review replaced manual review
• Money is transferred more quickly into the
  states general fund
• Record storage is reduced and retrieval is
  quicker simpler

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Goal of eFile Pay

• 70 Participation rate after one year

31
Impact on Business Tax Filings

• Far better than expected.
• Filing for businesses has been simplified
• eSU exists to address their questions
• Volume of E-returns exceeded our goal

32
Impact on Business Tax Filings

• For the quarter ending 03/31/06
• 98 of withholding tax returns filed through
  eFile Pay
• 95 of sales and use tax returns filed through
  eFile Pay

33
Impact on Withholding Tax

• Percent of electronic returns by quarter
• March 2005 87.7
• June 2005 89.6
• September 2005 90.8
• December 2005 97.2
• March 2006 98.3

34
Impact on Sales/Use Tax

• Percent of electronic returns by quarter
• September 2005 90.6
• December 2005 92.3
• March 2006 95.3

35
Conclusion

• We believe education and marketing helped make
  eFile Pay a success.
• Permanent staff, temporary employees department
  wide backups gave us the customer support we
  needed.
• With all available people we could have up to 41
  on the phones

36
Phone Statistics

• Fiscal Year 2006 ACD Phone Call Volume
• Total calls 117,063
• Highest volume week 7,169 (10/24 to 10/28/2005)
• Highest volume day 1,737 (10/31/05)
• Average week 2,251
• Average day 465

37
Phone Statistics

• Ratio of Transactions to Phone Calls
• July 2005 through March 2006
• 5.4 Quarterly Returns per phone call
• 9.2 Returns/Payments per phone call

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Conclusion

• Through the use of technology
• Improved customer service
• Reduced the taxpayers burden
• Promoted voluntary compliance
• Created efficiencies within the department.

41
Conclusion

• Still things to do
• Increase of electronic payments
• Businesses eFile return but remit paper check
• Need to raise their comfort level
• Continue to make enhancements
• Based on customer feedback
• Several enhancements made in April 2006
• Work on nonfilers
• Reminder emails letters after due date

42
CONTACT INFORMATION

• Paul Benson, Taxpayer Services Manager
• Desk 515.281.8966
• Fax [phone]
• Email paul.benson_at_iowa.gov
• Web site www.state.ia.us/tax