Can i document type e sign employee compliance survey utah
you know as of course as a result of the Kovach pandemic we were unable to hold our regularly scheduled salt taskforce meeting which I think will be next week so we have pivoted like all of major organizations now during this time to a more virtual setting so we appreciate everyone joining us today for our second in a series of three taskforce seven seminars or webinars that we're doing and appreciate your your taking the time to come and join us today we've got a good panel lineup here you can see the topic today is state tax administration and compliance we're excited about our presenters and the information that they've put together to present to to you all today our legislators and staff and our broader partisan revenue and fiscal leaders that are on the call today so with that I know the representative Abney one of our co-chairs is present and accounted for this morning so I think I'd like to say a couple of words before we get started sir would you like to address the group yes I would all because you directed me to do so I was not but yeah I I do everything I Linda says says to do now thank you very much everybody looks like we got about 66 people online right now which is great as we did the last one my stuff is pretty short I hope everybody is safe that's number one yourself your family and your loved ones these are uncharted waters and these these times are terrible and tough but I just want to continue to thank NCSL and the entire staff that works on the budget revenue tax and you know all of that kind of stuff because it's so important I use it all of the time in fact after the last meeting a few days ago I had a meeting with my finance subcommittee chairs and used a lot of the information that I learned and it made me seem really smart so thank you very much in CSL for that but it's important that that we continue doing this even though I want to see people are in person but it gives us a chance to compare strategy as it gives us a chance to look outside we're doing take ideas back and I hear so often in my meetings what does NCSL think and that's no joke people do ask fall at a time so this is great to help us to understand the data and to make some wise decisions and so it's useful for me I hope there's useful for you and I wanted to really continue thank our sponsors for allowing us to do this because without their help it wouldn't it wouldn't get done that easy so with that our Linda they show as yours as usual as I did last time though because I have to be a briefing with the governor in about 45 minutes I may have to leave after some of the presentations not because I don't want to be there but I do have that other duty I have to do so thank you Thank You representative at me we appreciate you taking the time here today and participating in our meeting Jocelin next slide please fantastic well again we are we have a really good and practical and very informative agenda for us today first up is a Deborah bier mom one of our sponsors that loyal sponsors that have been part of our task force for quite a while now and she'll be giving us a presentation on state tax administration compliance in this pandemic era then will be followed by miss Brenda Smith who also a good friend of ncsl and has been a wonderful resource for for a while now from the federal Federation of tax administration administrators on tax administration and some really good practical information for our legislative leaders here and then finally States state tax administration the time-coded from Russ Brubaker National Association of certified service providers we'll ask that again if you can keep yourself muted if you're not or since you're not speaking right now and just will keep track of your questions and comments in the chat box and you'll revisit them in between each of the panel presentations so thank you so much again and now let's get started Deborah Thank You Linda Thank You representative at me and members of the task force I appreciate the opportunity to participate in today's series on state tax administration and compliance in the kovat area today I want to provide a business perspective and tax compliance share with you some of the challenges that we have been facing and I'm sure the states are faced as well just got some of the specific issues that we're dealing with in types of emergency and then end with some recommendations for reforms that we believe can help both the business community and the states to more efficiently administer taxes so the next slide please so that's chard on the Left thank you two multi-state associates shows there's a very degree of openings in States and whether businesses can operate or not I live in one of the darkest blue areas here in these Jersey and so for multi jurisdictional companies this presents a lot of challenges we could have our tax offices in three or four different states and they could be closed but your estate is open so it still presents us challenges to comply with the tax laws because of where we may be located in our employees and many of these challenges that I'm going to go through are probably similar to those that the state tax agencies face one of the first things was how do we get our employees to operate when we are no longer allowed to go into the office and many of the employees in the Tax Compliance function in particular don't have laptops they don't normally travel that much they're on desktop computers to deal with big data file so trying to get them enabled empowered and I think one thing that we learned at AT&T after sandy hurricane sandy was most of our computers now are virtual we don't have my laptop is really just a dumb terminal my computers in in the cloud and fortunately for us many of our employees are set up that way which helps the one of the far things is the ability to access paper mail a lot of things and especially local government send out the notices and paper that require paper filings and require a paper checks and so we have to make special arrangements to try to get somebody to go into the office and open mail scan it deliver it to people electronically and then come in to process the checks and stuff and in today's technology some of those things can hopefully improve in process wise there's still going to be challenges when we get orders to go back to work and governments open up our building safe enough or are the desk too close what do we need to do to make our Milman safer our ways to come back and work effectively and so I think I'd like to step thanks a lot of the state tax departments because they have been working closely with us to address some of the challenges that were facing next like you I think the tax departments in the states are facing similar challenges and identifying a couple here that have been particularly problematic what is required wet signatures on documents so that means somebody actually has this and sign it we can't use an electronic signature that's required us to send documents in different places get them signed and scanned and be able to to deal with them to require employees of a corporation to accept the separate power of attorney for each of our affiliates so we might have some issues that we want to deal with the department with it could be audit assessments it could be questions and how to file a particularly complex transaction with them and every time we have a employee that might be expert in it we're going to have to get a pal returning form for that employee to deal with it on some of localities in particular and states do not allow for electronic payments as I mentioned earlier we get paper notices and assessments and tracking them down and responding to them timely is a problem and a big one is not given the tax agency's authority to adjust filing dates and returns assessments appeal deadlines and types of emergencies finally some states do not have electronic processes that are data entry systems rather than allowing us to upload documents so they might say okay here we accepted electronically when you need to have an employee there a team key every item into our system as opposed to accept in electronic transmissions next one so some of the recommendations for minimizing tax compliance burdens and emergencies I'm going to divide them into two parts this first section is during the emergency itself what we're going through right now and then I'll follow that with some recommendations for our going forward basis that I think will make us all be able to more efficiently comply with the tax laws so the first thing is to extend file and a payment deadline and waive interest in penalties including suspension of interest on assessments especially if everything's on paper and when states are looking at this I think you know they're following the feds and they have a corporate income tax and personal income tax but they're not necessarily thinking about some of the unique corporate taxes on businesses that are in lieu of the income tax for example insurance companies pay premium taxes some telecom companies paying gross receipts taxes and States rather than income taxes I think so for many of the states have addressed the filing deadlines and either legislatively or through administrative action and we participate that we also recommend that you allow for secure email transmissions of documents I you know secrets taxpayer secrecy is paramount and protecting that is important but there are ways to use secure transactions to do that and allow companies an option to continue withholding as the employee location while employees are required to work for home and limit corporate Nexus this is particularly problematic because a number of states tax employees on day one when they're home and and that's your permanent work location so New York for example taxes residents of New Jersey who work in New York so now the question is what happens when they're required to be back home in New York and work out of the your home as a jersey home so sorry and so there's a lot of questions around that fortunately Jersey is one of the states that issued a little guidance on that Pennsylvania Mississippi have two that basically said companies you have the option to either withhold as you are at the work location or the employees and we're going to forgive any penalties and interest that occur for this extend deadlines for appeals and claims to refunds especially if they're coming on paper our ability to find them timely and then respond timely is limited to give a little more time during the emergency and a good resource that I found this on the council state taxation has a tracking chart and if you the link is here and I hope that the presentations will be shared but at that link for every state you can find every notice that they've given on a tax compliance standpoint on delays whether a sales tax income tax court X and it's a really good resource to use next slide please so finally some recommendations for minimizing tax compliance burdens on a go-forward basis one is to try to eliminate manual processes and paper violence for tax compliance what its claims and appeals would take today's technology there's so many secure ways that we could deal with these filings in electronic way and this may require and legislators for you to provide more resource to the tax departments to upgrade their systems to be able to handle and access some of the electronic technologies work jointly with other states and the federal government to standardize electronic platforms and secure email technologies and Myranda your FTA technology task force is probably a great example of States working together on technologies to [Music] standardize and make it easier for businesses to interface their systems with the state provide a process for taxpayers to designate employees that can interact with the tax agency Longway help us a lot of big businesses if we can get things electronically and have one contact with the department and they have a contact with us an electronic email for us but they can use that contact information to get a hold of us timely and quickly and we can resolve issues and ultimately pay you faster and then adopt statutes that automatically in both relief provisions and provide authority for Tax commissioner's to take actions that will help us deal with tax compliance and times of emergency or disaster when it's been declared by either the President or the governor in your state there are some states that have something like this in place for example I think Oklahoma has a bunch of rules that come into play for tax compliance but only when it's a tornado which you know rightly so they have a lot of experience but trying to grow on that for all disasters will be helpful to everyone and I think the task force itself has a facilitating rapid response to disaster Act in 32 states have enacted that so forth it really only applies to restore critical infrastructure but perhaps that's a model that can be used for other purposes as well less likely so why should you care I think if we improve the ability to do tax tax compliance more in a technology fashion it will last state and the private sector employs to effectively work from remote locations if it's necessary permanently reduces the cost of purely administrative and record-keeping tasks facilitates and speeds up the remittance of taxes by companies it reduces our risk and costs from failure to remit taxes on a timely basis due to factors that are out of our control and Coonan lost now misdirected or sent to offices that are no longer in existence and enables the state to provide immediate responses in time of emergency so be glad to take any questions on the topic thank you [Applause] we are there any question right I don't see any questions I think we're okay to move on we can always take some questions later if we need to we can revisit at the end but thank you so much Deborah and we will move on to the next presentation Brenda hey everybody and next life so much of what Deborah said yes indeed the industry and the state tax agencies are in many ways than their own both were in the same boat the tax agencies are in various stages of telecommuting some are completely out of their buildings Utah of course had to suffer through the earthquake on just about the first day that this all started giving it further complications some have skeleton crews in their offices are dealing with that paper that Deborah referenced some other things obviously IT you need to have some people on hand to deal with that they have been working to keep people separated some agencies have even put that people who have to be in the offices on different teams so that if one team gets sick or is is forced to further stay at home quarantine then another team is in place to take over those particular duties so great deal of thought and strong management has been going on for the past month and of course this isn't going to end anytime soon so it will be continuing even as the agencies are looking ahead to what it's going to mean to open their doors again both to the rest of their employees and to the to the public one of the things that took everybody's breath away early on was when the federal government extended the filing payment two days to July 15th now I'm not going to spend much time on this everyone's well aware of what happened and I think everybody on this call is aware of what that meant to the states ultimately they ended up having to move much a significant amount of their tax revenues from one fiscal year to another this caused a white deal of problems on top of all the other problems and of course new legislators well understand what that means your FY 20 but it's and your FY 21 budgets fell halted pieces overnight so a lot of works been going on on the budget that went it's outside of the scope of what we normally deal with with an emergency economic fallout of shelter at home is another thing the agencies are dealing with big-time I just wanted to refer you to tax Edmond that org FDA's website there's a very detailed report on exactly what this means and we will be updating that report FDA's research economist Ron alts who's put that together based on information data from the states and from other sources he'll find
t readable and I we're very proud of that piece of work you want to understand where we are going with the budgets also update that just a little bit we get tax revenue reports earlier than some people do and based on what about 20 states now had reported in on some of their April looks like we're seeing tax collections decreasing at a median rate of nearly 40 percent in April that's year-over-year and again that's a median rate and that's April which we know is going to be an unusual month in many respects the delay in the income tax filing extending the filing payment date is behind a lot of this the income tax decreased by more than 56% among the states that we've heard from so far next slide so the response of course the degrees of agency shutdowns this obviously affects the taxpayers it affects the management of the agencies it affects their ability to work with the legislators on changing of the budgets but there's good news coming out of this and I wanted to bring some of this up we're actually seeing good reports on telecommuting there's not a lot of data to back this up but when we hear from the people who are in charge of large sections of the agency for instance for collections communications they they say that they are really seeing improvements that that people spirits are high that their numbers are up that they are being able to function well with the equipment that they have at home that they have been able to deal with all the distractions that everyone has to deal with and they're determined to make this work now of course it helps that in some parts the agency telecommuting was part of their life anyway in particular audit and collections to a certain extent in some agencies even taxpayer assistance their telephone the sisters they were already in place other parts of the agency they had to make do one of the responses has been for those people whose actual jobs could not be well moved to a telecommuting or for those who could not get the equipment to telecommute for a while we all know the laptops sold out and it takes time to set someone up so that you have a secure access into your office they did training they found their managers found valid uses of their time others were moved to other activities and they've been a deal with some of the backlogs here and there keeping everybody busy even if some of their work hasn't been exactly what they usually do this all this of course has worked to improve morale we've been hearing from some interesting ways that folks have gotten together on little groups UN's or had just personal interactions trying to replace that camaraderie and the sense of working together that you lose when you're not in the office together next slide Oh your first takeaway next slide so this is a little obvious but I really felt the need to say obviously your budget plan that you've given the agencies has fallen all the pieces and it's going to continue to fall to pieces the tax agencies are they understand they're likely other agencies they are being told three five ten twenty percent cuts in your current budget at the same time they have to pay for those computers that they just put in the field for people to be able to keep the tax agency open during this time and to keep the dollars flowing into the state the buildings are being retrofitted people are putting the clear screens in front of the people who are going to have to face the public or one another cleaning obviously your cleaning expenses are going to be significantly higher they're buying things that were not scheduled to be bought before for instance in-person scheduling software they're taking steps to know that yes we need to have tax payers come into the office no matter how much we do by phone about how much we do remotely you will need to have people come in for this or that they're being very careful about looking to see where we can minimize that but if you have to have people come in obviously you want them to come in one at a time or HU at a time depending on how your office is laid out there may not be room for them to safely keep six feet apart in a line so they're using scheduling software to allow the taxpayers to schedule a time to come in this is not expensive but it's not easy either because you have multiple it's not just one person saying I want to come in and talk to one person you have many many many taxpayers trying to schedule something that could involve an entire team or division of the agency and then people will need time off they need to be able to say I'm not available at this time so it does take a real software and handle this and then of course the email to say or text yes it's your turn come on into the building that sort of thing plenty of these kinds of activities going on your IT is just having to buy some things it didn't have to buy before you're gonna have more sickly sad to say a lot of people aren't going to be at their jobs for awhile that productivity is going to go down next slide so things to think about and in particular I wanted to thank Deborah and grist rut Russ I know is coming up to say some of the same things about what taxpayer needs are for both large and small tax payers I need to explain a little bit of that and to say a little bit of what is going on and maybe say a little bit about where where the legislators can be of help one example of why things aren't perfect yet electronic forms by now you might think why on earth are there still forms that are being filed on paper whether that is actual a tax filing or a recording of some kind well this isn't entirely in control of the tax agency has several things going on you have your IT budget you've got to prioritize and most of the time I know Julie's are they're not in her head at this most of the time when you are trying to bring electronic forms you're going to look at those their most in use there have the highest impact that have the highest usage and unfortunately for a lot of the large tax payers their forms are important to them but they're not the highest volumes and so some of those get dealt with last also these forms aren't created by the tax agencies this is a third party activity you have to a company may create its own but for the most part you're using companies that create forms and create electronic filing and you're dependent on them to make these forms available so there's a market out there to deal from I did touch briefly on competing priorities sometimes it's just as much as you may want to do it you've got to deal with the alligators at the same time the swamp is rising and some things they they'll just get to it later I actually think many of the agencies are very proud of where they are now in happiness didn't happen three or even five years ago when things were much more paper-based and you didn't have the portals on the question of can't you email things can't you send documents in by email a couple of issues there you're going what you're going to see is the agencies are using portals to deal with these issues and portals again it's it's a big IT lift and it takes time to develop them fully takes the money to get the IT going to develop them fully but you have to do most of this through a portal otherwise you we don't know tax agents it doesn't know who it's dealing with and believe me there are a lot of people out there who would like to pretend to be AT&T or some subsidiary of AT&T and sending in information that you don't want them sending in or asking for information you don't want asking for so one of those compelling reasons is taxpayer confidentiality it's it's not good at all it is supreme taxpayers you can count on your data being held confidential and protected from attacks by criminals by business competitors my goofballs or by anybody else also many of many pieces of data that a tax agency deals with involves federal tax information that has to equally be held confidential but it also has to be accounted for in very specific ways and if the IRS doesn't approve of a process you can't do it you'd be shocked to find out how detailed this goes that's just the world we live in and something we have to work with but it's also why sometimes the world isn't it's easy as we would like it to be and then of course there are legal constraints and statutes weakening which is why I tax agency always hopes their legislature if they hear hey why we can't redo this bring them in and talk with them and get their thoughts on it because one of the things they're always looking for is what's this mean down the line where are we going to have challenges nothing the taxpayer been working with who has a legitimate request and Jill legitimate need but it fits in with other parts the statutes and they're going to tell you that they feel they are at risk for losing something it could be a tax position it could be a case it could be revenues but if they're not taking a position it may be because they need additional work on their statutes that you can help it next slide next take a look I love this one I bring it out pretty regularly the tax agency's mission is to collect the correct amount of tax it is not to balance the budget you do hear this talked about media and he likes to bring this up oh look here we're having a tax crisis we're a revenue crisis what does this mean for increased collections my perspective is that the most aggressive the most robust and forced collection you're ever going to see is during the good times it's when the tax agency has money in its budget it's had time for training it's had time to bring people on staff and the bad times they're hurting for budget like everybody else most revenue collections are coming in voluntarily they are not through collections they're not through audits if you just look at the big numbers it doesn't even make sense to think that you're going to make any substantial difference in a shortage of your budget by doing additional collections you will get some but in terms of is it incremental yeah it's just not going to be enough to be able to fix your budget problems just have to sort of make that clear because you're going to be hearing from reporters and you might want to sort of adjust their thinking on that a little bit one thing that you are going to see and I don't like my folks for doing it like this is oddities and collectors are just the visible tip of this iceberg you will see people come to you and say oh give us more budget more money we can hire more auditors and collectors and we can bring in more money that's true it's not going to be enough to make a significant difference in its severe budget problem it is true but what is not being said is that if they do the same with more people who work in the voluntary compliance area they can probably do even more it's just harder to track and to show the numbers so they don't talk about that part with you the other thing to know is that you may if you're tempted to say I'm gonna give you money to hire some more collectors and some more auditors understand that that's part of the team a collector an auditor doesn't work alone forever so many auditors that you have you have to have an increase in the legal staff you also have to have an increase in the support staff and an increase in the IT staff so if you're going to give money to this tax agency part of my take away it is trust the people you are giving your resources to authorizing the resources for trust them to know what they're doing don't tie their hands talk with them ask them to show how they're spending the money how they plan to use it but listen to them as they tell you we can't just hire an auditor we have to hire these other people too or in the end you end up with nothing without what you're hoping to get next slide I got a story to tell with this I did mention that that most revenues are paid voluntarily there's a lot that goes into voluntary compliance that people tend not to think about because again you like to think about enforced compliance as being auditors and collectors but Deborah really pointed out that what they're looking for is help in paying the tax they're going to pay the correct amount of tax as best they understand it they want guidance they want good forms and instructions they want the IT ability violet electronically to do that you need other things leadership development definitely want to listen to the taxpayers as they tell these things but here's here's the story I like to tell that goes along with this back in the last century there was a fellow in Australia and Alan bond Kay what he rose from nothing and and from some light-fingered thieving actual like breaking in kind of leaving to become one of Australia's biggest well he owned corporations he owned gold mines he owned buildings television stations very high-profile and usually called the corrupt business dealings in 1982 he was the bankroll behind the Australian America's Cup boat that won the America's Cup the first time the Americans had lost it and I actually had he was hanging around Newport at that time and so I got to hear and talk from time to time one day I overheard him talking about a business acquisition he maybe had bought up another company he didn't much use the term at the time but you could also would have called him a business raider he told this person and the first thing I did when I bought this company was to fire all the communicators and sort of leaned over and said and you know why I did that because they don't produce now obviously later up became known that he was a Raider and he was just trying to buy these companies for their assets to use for his own purposes and then got them and then get rid of them Alan bond ended up serving seven years in prison after pleading guilty to using his controlling interest in one company to deceptively siphon off another billion into another corporation and that always bothered me what he said about the communicators because I was one but it just goes to show that the communicators have a hard time showing their worth you don't count it the same way you can count on it in collection dollars but that doesn't mean that they are any the less valuable or worthy of being supported financially and again if you look at what the taxpayers tell you they want it's on the softer side that they want assistance in being able to file my next one Oh a couple of excuse me I dropped my notes I wanted to share a few other good things but it's happening right now in your tax agencies obviously you know that everybody has changed their collections in different ways in a different amounts but the liens are not being imposed collections are not being collected new debts are going in system but the Billings are not going out instead the collectors have turned their attention to creating pay plans extending pay plans liberalizing pay plans those kinds of activities and I was on a call yesterday with a bunch of collectors and it was really surprising what we were learning from this the tax payers that we are hearing from under the course collections are encouraging and happy well happy is a strong word they're not unhappy they're in a much better mood than we expected them to be for sure they have been telling our folks that the we thank you for being proactive for reaching out for helping us with this we're not just saying we're looking for money now they're calling to say we understand what's going on here's what we can do now what else do you need us to do another thing that you want to know that your collectors are saying they're looking at strategies on looking forward because they know that times are changing that they say they they're aware that there needs to be an awareness that many for instance auditors you don't want to spend time on an area of an audit if you know that tax payers not going to be able to pay at the end of it you have a 3-year look-back you may have had an audit issue three years ago but that business is not in the shape that it is in today that it was three years ago so capability to make good on debts is going to be limited they are expecting to see more tax payers pocketing their trust fund dollars taxpayers who normally are good honest taxpayers are going to be keeping their sales tax dollars or they're withholdin
dollars to keep the doors open for a few more weeks basically the message that they're using is pay what you can now and we will continue to work okay next slide I think I covered most of that and especially pay as much as you can now is the main message that we're hearing eyes wide open is recognizing that what we're going to see from the tax payers going forward is going to be some different from what we see in your last five to ten years next slide okay and and this is your takeaway from all of that that agencies are talking among themselves I took this as a quote from one of them this is a good opportunity to look at statutes and the tools that the legislature can give you to do more effective collections they're going to come to you with some ideas I think you're going to find most if not all of these good ideas ideas that you would be perfectly willing to consider these are not stomping on people ideas they're their ways to deal with deaths before they get out of hand ways to make things electronic instead of manual ways to save money on the budget and so you can look for that coming forward next slide I really had to put a plug in here to the NCSL we work in the same building with them at least during normal times we've been spending even more time together on the phone in quite a few different ways in the last couple of months you just can't imagine how important they are to the other agencies out there to our ability to share information with you through them but also to get information back from them so that that we can more effectively do our own jobs they're good people and they they've been spending nights and weekends doing work that you're probably not aware of and they're not going to bother to tell you about but I wanted you to be aware of that and similar to that you know we recognize that you are doing the same every elected official hopes to and the good times and this is the opposite of that your budgets fell apart underneath your feet you've got to redo the good work that you had already done I just want you to know that those of us who work in States understand that and recognize it and so I just wanted to say on behalf of everybody thank you for that and that's it's pretty much all of God well thank you Brenda I appreciate your your nice words about what we're doing here behind the scenes I guess of course you folks are truly doing the same everywhere I think that's been working even more behind the scenes and virtually than we ever have everyone that is the whole world I think at this point but on thank you again for your words and a great presentation and trying to see if we have any we have no questions right now but out perhaps were willing them for the end and that's fine in the meantime we'll just transition to our next presenter and Russ the floor is yours sir well thank you I need to mention up front that I live on an island with somewhat unstable internet connectivity sometimes and every once in a while I will it can lose me for but usually only for a minute so if you lose me I'll be back I I want to thank the task force for this opportunity and I'm especially pleased to be able to be on with Deborah and Miranda I've known both of them for many years working with them first as a Washington state tax administrator and now in the private sector for a certified service provider I just want to mention one thing I especially like about the perspectives of each of them one with Deborah is that she works for a very large company but it is by its very nature structure to assist smaller businesses with their tax obligations so she gets the complications that there are for both large sellers and small sellers that's an important perspective and honestly my favorite thing about Miranda over many years is that I regard her as the keeper of steal this idea and she is a strong advocate for stealing good ideas wherever you can find them to improve administration and education and I think that's great so I think there are some folks on this call who are not familiar with certified service providers and many of you are and so this will be a little redundant for you but I just want to quickly recap what we do certified service providers help taxpayers with their obligations in sales tax arena largely and the things we do for them include registering them and all the states where they need to collect doing their tax calculations we integrate our software into the retailer system the software makes tax ability determinations and assigns that's correct tax rate and taxing jurisdictions we do return preparation and electric tronic we file those returns we can do it through batch filing or that's available with States the same with the remittances we are chronically remit those and that can be done by batch filing and we do the records retention that is useful to maintain for auditing purposes csps were originally developed in conjunction with a streamlined sales tax effort but we now provide the services we provide in all the states and the sellers who make sales and we file in all 46 states so it is not limited to streamlined States so I'm thinking the folk so next slide which is we're already turned to is giving sellers administrators of the assistance they need and I'm thinking about this in budget terms I know that you as legislators are facing huge budget and policy challenges without the usual time the usual reflection and the usual input that you have and I know that budgets are in peril and for tax administrators as well as others I think some of the important considerations for rating agency budgets include many of the things that Virender covered that auditors and compliance officers are not the own essential staff about staff to meet the needs of taxpayers and keep revenues flowing I think it's what you're after an education is often the better investment over enforcement and that is especially true in a time of crisis when taxpayers need guidance so the folks who staff information lines the folks who design websites and populate the web sites with up-to-date information or in clear language and adjustable formats those staff will be critical for both taxpayers and the rest of revenue agency staff so determining your essential staff requires a kind of nuanced evaluation next slide one of the most important things I think is to be flexible and that is to give your revenue agency the opportunity to maximize accurate tax returns by focusing on guidance and education and making administrative simplifications and as I've mentioned for before stealing the best practices from other states many agencies already have tools that they can work with for distressed taxpayers like voluntary disclosure agreements hardship provisions and others let them have the leeway to use those to provide maximum assistance to businesses while accurately collecting tax I think one of the things you might want to do is review with them if there are statutory changes that on an upcoming emergency basis that could help them provide assistance to taxpayers that you would want to see next slide so we live in a world where I think we all know sales online have been been increasing hand over fist for several years now many years now actually that trend is accelerating covet has turned out to be a realist accelerator there's not a lot of data yet but what we do have is pretty compelling ecommerce is now 30% of retail as of 425 2020 it was 13% as of 3:17 2020 the source of that is Bank of America eat grocery is up 50% according to Adobe analytics and march on march on line transactions are up 74% according to ACI worldwide we're gonna see a lot more data and I think it's all going to trend in that direction so the shape of the future is uncertain but the new normal will not be the same as pre kovat we know that already the march to an expanded online economy just picked up the pace new habits are being formed by consumers and there many of them are going to stick so next slide I think what that means for you is that you really need to be paying attention to online sellers really paying attention and some of the things to note are at the top of the slide that they focus on selling products not tax developments they're unfamiliar with sales tax laws and compliance in many instances they find that they face registration requirements and complex forms and that these are an obstacle to their complying and it's kind of the old adage about you'll draw more bees and flies with honey then will you will with vinegar so that's it's an important thing to think about most of all they need education and guidance and they need some simplifications so the good news is that you're going to have thousands and thousands of retailers submitting taxes to your states that haven't done so before the bad news is that you don't really know how to do it there many of them are relatively clueless you know most of us live and breathe changes in sales tax most online sellers do not they are less aware of their responsibilities they are less visible to administrators and many of them are not equipped to collect and remit tax in 46 sales tax states and the same is true for many Main Street sellers who adapt and develop a strong online presence filing in 46 states is a entirely different ballgame than filing in the state where you have Nexus so I've talked to quite a few tax administrators who like me have taken careers as tax professionals and different manners and many of them are shocked by how difficult and time-consuming it is to register in many states they're shocked by how much money they need to charge their clients for doing this in order for them to make ends meet next slide so I would say that things that you need to consider administrators where you have the authority to do it and legislators where you need to give them the authority to do it is the way oops this might be the internet glitch she was mentioning Ross are you their tax information okay hey Russ you cut out for for one minute starting at the wave registration fees point okay thanks so yes I do have an unstable connection so the point of this slide is that there are things that we think need to be done to make it easier for folks to comply especially online sellers and that in some cases administrators may have the authority to do some of these things but they may need legislative authority as well or a change in statute to make it possible and the kinds of things that I think you ought to consider for online sellers is to waive registration fees provide a simple registration form and process provide a simpler sales tax return or simplified electronically turn provide liability relief when they use a CSP to make sure that they're filing accurately and to provide clear guidance in multiple areas and there's a lot where this is needed and I would point folks to the NAC SP National Association of certified service provider input to the NTC waive their implementation workgroup and that covers a lot of those areas and I'll mention how to refined those resources at the end here but the relationship between a state and a seller with traditional nexus and that of a seller with online presence is profoundly different and I think that's why you need to consider doing these things to help online retailers meet their obligations the perhaps the most sage and practical tax manager I ever have known is Warren Townsend and he always used to say if someone wants or needs to throw money at you get a bucket I think that's still good advice and I think that's what some of these reforms would do next slide in terms of future legislative action we all recognize that right now you have enormous challenges with limited session time to meet them and it's understood that you're in crisis mode and don't have time for every potentially good legislative idea so I would encourage you to encourage your agency to do all it can with the administrative authority it has to accomplish your goals during this time period if there's an additional authority you and they can quickly identify that would help the agency do that for you then consider legislation that would would give them that authority what would be useful will vary a lot by state so even though this is not a time for looking at lots of legislative proposals that don't deal with the immediacy of dealing this crisis it is the time to start keeping a list of legislative changes that make sense for the long term in an e-commerce economy removing obstacles for online sellers so they can easily get plugged into your sales tax system and start sending you dollars seems to make eminent sense bigger changes may as well many states have looked too streamlined as a way to modernize Pennsylvania uses CSPs differently in their own simplification model Illinois Connecticut New Mexico have taken steps in a similar direction and there are other states considering other directions colleagues in the tax world are thinking about other major changes that deserve discussion and I think about it is it likely a tax system that was designed in Newark 1935 is set up to deal structurally with an e-commerce world it needs maybe a major overhaul so these are things to think about when things settle down enough for you to return to that list you have some options for better position in your state to take advantage of the e-commerce economy next slide we of course believe that certified service providers can help and I don't have not spent a lot of time talking about revenues and what we can do in regard to assisting with revenue collection I didn't really see that as the focus of this presentation you have a presentation on that next week but I do want to refer you to to our website software solutions make it easy for sellers to comply so I'd say see our website at simple sales tax org it has a lot of useful background information it has a technology brief on how the technology works to make compliance easy as a revenue study done by multi-state it has model legislation that you can consider and we're always happy to assist with considering other consideration of other kinds of legislation and it has a provider contact information we do want to be part of the solutions that you work toward to get through this crisis and to develop stable funding so that concludes my presentation and thank you for letting me participate thank you so much Ross I appreciate that we've got a couple questions I think in the chat box here Jocelyn do you want to go through them until and we can please and at this moment you know you can please go ahead and enter any about other questions you had and we'll take them up as they as they come thanks sure Thank You Linda the first question is have you heard conversations on what would happen to state tax filing deadlines past July this is fraud I think that one is for the tax administrators if not you can you can be more specific I'm assuming that is a reference to something that came out of the White House yesterday that the federal government might might think about further extensions of deadlines into October even through the middle of December and and if that's the question no we haven't had conversations about it because it just came out and it's pretty hard to have a meaningful conversation about something when you have no detail on it we I'm a little confused well you can see the politics behind it from a tax administration standpoint most of the tax payers get a refund those who have to pay many of them went ahead and paid on April 15th anyway those who needed an extension many of those who wanted to pay later found that they couldn't get the help they needed from their bank to delay theirs payment they had scheduled it for April 15th tax agency can't help you reschedule it that's between you and your banker and a lot of those ended up being paid anyway so we're down to a pretty small part of the population that that's significant dollars involved overall but in terms of individuals not that many so I'm not sure what the point would be but no we haven't had conversations about it yet so we don't know what it would be thank you the next question is in regards to GrubHub doordash instacart have states had issues collecting and remitting taxes are there any states looking to regulate to bring them
n line with online that's an emerging issue and with all new business models it takes a while before it settles down so it's still in what I would call the early stages of understanding it's going to be a different answer in each state is and a different answer with each of those business models because they work differently where the actual sale takes is different with each of those so that who's collecting the tax is different who's permitting the text is going to be different so I mean their states are working with it they're looking to see how does it apply they're notifying those tax payers well they think it applies there's some litigation promise some legislators are certainly looking to say how do we want it to apply and ultimately that is their decision a state can only look at existing rules and regulations and statutes so it's still very much a work in progress there and the short answer to that is it can be what the legislators want it to be thank you those are all the questions in the chat box for now Thank You Jocelyn does anybody else wanna ask another question our presenters okay thank you again I appreciate all the time that you took today to contribute to our discussion you can always feel free participants to email us the questions separately and we'll you know forward them on to our presenters to get further clarification that's always something we're happy to do in case you can't think of your question right now or if something comes up later again next week we're having our third in our three series here our trio of virtual webinars next week it's the as you can see the pandemic and damage to damage done and we'll be talking about revitalizing state revenue streams for sure will be a very spirited an interesting discussion that on those states and friends will want to hear about I will also say that you know it's I think officially will be announcing on Monday that our summit will not be taking place I think we kind of saw the writing on the wall but more to follow on how we're going to be transitioning and pivoting and what we're going to be providing in terms of education resources networking in lieu of or at least until we can have a larger meeting so that is out there now there summit will not be taking place in August and then also our salt fiscal leaders reboot mean that we were going to have in Park City in July also I'm sure you could also figure it out is not going to be taking place so we will be following up with you all shortly on how we're going to be reinvigorating that next stage of our salt task force and our fiscal leaders so stay tuned for some exciting news and some developments in that area and of course do would appreciate any contributions and any ideas you have as work innovating and moving forward as usual we'd like to thank our salt task force sponsors without your support especially in these times you know we would not be able to put together this programming and be able to provide the resources to our salt task force members and fiscal leaders so thank you so much and look forward to seeing you all again next week at the same time 1:00 p.m. and again please feel free to reach out if you need to have a wonderful weekend
