A lien is a tax or debt claim against a property, business or person that must be satisfied before the business changes hands or the party involved takes on new loans. The increased pace of lien filings will not mean increased collections for the state, as such debts usually take months or even years to pay off.
“We’re in the midst of a multiyear project to bring all of our 33 different taxing systems into a single, integrated tax system,” said Elizabeth Brassell, spokesman for the revenue department. The state’s “legacy systems [don’t] talk to each other. … They’re basically separate informational silos.”
This fall, the state is moving business tax functions into the new system. “So in anticipation of the transition — during which time normal lien processing may be suspended [or] interrupted — we worked to clean out the queue of cases awaiting the filing of liens,” she said.
The modernization, planned since 2008, began in March 2013 and replaces the nearly 40-year-old mainframe system and the decades-old programs that handle income taxes, vehicle and liquid fuel taxes, corporate taxes, cigarette taxes, alcohol taxes and many more. This year, the state plans to collect $12 billion in personal income taxes, $9.5 billion in sales and use taxes, $2.8 billion in corporate taxes, and $900 million in tobacco taxes, among other tax categories.
The current round of upgrades, to the state’s eTIDES — for Electronic Tax Information & Data Exchange System — is scheduled to run through the weekend.
Pennsylvania is one of several states in the midst of such projects; California, Kentucky, Illinois, Massachusetts and others are all confronting decades-old computer systems that are nearing the end of their lifespans or are reaching maximum data capacity.
States modernizing tax systems are not only looking for new equipment — they also want a return on investment.
That means they are hoping to do a better job collecting revenue; analyzing taxpayer data and payment trends; and providing customer service, particularly as more taxpayers file their returns via computers and, soon, smartphones.
For Pennsylvania, Germany’s SAP is providing the treasury and risk management software. Dublin-based Accenture is managing the project for the Department of Revenue.
By the time the project is finished — which should happen in 2017 if the work is completed on time — the state will have spent about $116 million overhauling its tax software and hardware, according to the department’s own estimates.
Corporation taxes were the first to be migrated onto the new Pennsylvania system. This fall, most of the rest of the business taxes — such as sales taxes, employee withholding taxes — will come on board. Next year, personal income taxes will join the new system.
Ms. Brassell said the department’s goal is that the migration will “impact taxpayers as little as possible.” They will, however, notice some technological and functionality improvements to eTIDES and to the state’s TeleFile tax-filing system. The paper tax statements that are sent out to individuals and businesses will also take on a more uniform, easier-to-understand format.
“Greater efficiency, and better customer service, is kind of the endgame for this entire system,” Ms. Brassell said.
The systems upgrade is part of a series of changes at the Revenue Department, which has become more aggressive in the last four years when it comes to filing liens and combing through tax returns in search of fraud or underpayment.
©2014 the Pittsburgh Post-Gazette
