COBI 2015 - Tax Processing Division

Overview
Issues
Performance
Financials

Sources Uses

FY 2016 Appropriation

The Tax Processing Division designs and produces both on-line and paper tax forms, instructions, and publications for taxpayer use. It collects and records tax payments and taxpayer information, processes paper and electronic tax documents, and maintains archival records. This division is using updated technologies provided by new systems to image documents. Copies of returns, payments, and correspondence can now be accessed in real time, as compared to the prior microfilm and manual retrieval process.

Funding History

Appropriation Overview

During the 2015 General Session, the Legislature appropriated for Fiscal Year 2016, $7,270,300 from all sources for Tax Processing Division. This is a 4.8 percent increase from Fiscal Year 2015 revised estimated amounts from all sources. The total includes $5,183,900 from the General/Education Funds, an increase of 6.2 percent from revised Fiscal Year 2015 estimates.

Appropriation Adjustments

In addition to statewide compensation and internal service fund cost increases, the following appropriation adjustments were made during the 2015 General Session:

DescriptionOngoingOne-Time Income Tax Revisions$83,000$46,000

OngoingOne-TimeFinancing Source

$83,000$0Education Fund

$0$46,000Education Fund, One-time

By delaying refunds, enactment of this legislation could increase interest income to the Education Fund by $41,000 annually. The bill also imposes higher fees on non-compliant businesses with withholding filing requirements. For every 1% of continued non-compliance, the bill increases the fee revenue to the Education Fund by about $100,200 up to 84% in compliance (i.e. 50% continued non-compliance = $5,010,000 in increased Education Fund revenue). This note assumes 84% compliance, at which enough businesses are in compliance that the revenue impact on the Education Fund is neutral. At 100% compliance, revenue to the Education Fund would decrease by $2,438,000 per year. Enactment of this legislation could cost the Tax Commission $58,000 ongoing for 4 half-time FTE to review and verify employer and employee information and $25,000 for letters to employers and employees. The bill may also cost the Tax Commission $46,000 one-time for bulletins and inserts regarding the new requirements.

The Processing Division deals with approximately 3 million paper and electronic returns and payments, which includes review of electronic submissions and processing, entering data, scanning documents, and archiving of paper documents.

Percent of Tax Refund Requests Processed Within 15 Working Days

A measure of efficiency for the division is the percent of income tax refund requests processed within 15 working days. Once taxpayers file their returns, if they are due a refund, they would like it in a timely manner. This measurement shows the percent of returns that were processed within 15 working days. An exception to the target is any tax return that requires further research or follow-up with the taxpayer.

Percent of Business Tax Returns Filed Electronically

An online tax return application is available for all businesses using a Taxpayer Access Portal (TAP). The TAP requires fewer resources to process paper returns. Increased efficiency and reduced costs are realized with a high percentage of electronic tax filings.

Timeliness of Recording and Depositing of Income Tax Returns

Indicative of the Processing Division's accountability are the dates by which all timely-filed income tax returns are entered and checks deposited. The goal is to record and deposit these funds as quickly as possible to keep account information current.

If the processing time for any timely-filed return exceeds 45 days from the date of filing, the Tax Commission must include an interest payment on the balance of the return of 2 percent.

Intent Language

HB0003: Item 61

Under Section 63J-1-603 of the Utah Code, the Legislature intends that appropriations provided to the Utah State Tax Commission in Item 13, Chapter 10, Laws of Utah 2014 not lapse at the close of Fiscal Year 2015. The use of nonlapsing funds is limited to the costs directly related to the modernization of tax and motor vehicle systems and processes.

HB0003: Item 61

Under Section 63J-1-603 of the Utah Code, the Legislature intends that unspent funds available from Temporary Permit Fees paid to the Motor Vehicle Enforcement Division shall transfer at the close of Fiscal Year 2015 to the new restricted fund created for the deposit of these fees.

The Processing Division is funded by the General Fund, Education Fund, Transportation Fund, and the Tax Commission Administrative Charge Restricted Account.

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Funding Source

Expenditure Category

Appropriation Type:

Appropriation History by

Sources of Finance	FY11 Actual	FY12 Actual	FY13 Actual	FY14 Actual	FY15 Approp	FY15 Change	FY15 Revised	FY16 Change	FY16 Approp
General Fund	2,178,400	2,186,500	2,057,100	2,111,300	2,446,700	(155,100)	2,291,600	83,900	2,375,500
General Fund, One-time	0	0	0	7,800	15,900	0	15,900	(300)	15,600
Education Fund	3,187,000	2,551,500	2,485,700	2,365,100	2,731,800	(173,100)	2,558,700	171,000	2,729,700
Education Fund, One-time	0	0	0	7,500	15,200	0	15,200	47,900	63,100
Transportation Fund	929,100	929,100	929,100	929,100	929,100	0	929,100	0	929,100
Dedicated Credits Revenue	229,400	242,100	278,000	339,600	282,400	76,300	358,700	0	358,700
GFR - Sales and Use Tax Admin Fees	815,900	0	0	0	0	0	0	0	0
GFR - Tax Commission Administrative Char	0	808,400	770,400	635,800	821,300	(52,100)	769,200	29,400	798,600
GFR - Tobacco Settlement	76,800	18,500	18,500	0	0	0	0	0	0
Lapsing Balance	(19,300)	(7,200)	0	0	0	0	0	0	0
Total	$7,397,300	$6,728,900	$6,538,800	$6,396,200	$7,242,400	($304,000)	$6,938,400	$331,900	$7,270,300

Categories of Expenditure	FY11 Actual	FY12 Actual	FY13 Actual	FY14 Actual	FY15 Approp	FY15 Change	FY15 Revised	FY16 Change	FY16 Approp
Personnel Services	5,621,800	4,946,100	4,853,500	4,575,800	5,241,900	(158,300)	5,083,600	137,600	5,221,200
In-state Travel	100	100	0	200	1,400	0	1,400	0	1,400
Out-of-state Travel	4,800	1,300	7,600	0	5,100	0	5,100	0	5,100
Current Expense	1,603,900	1,459,700	1,413,200	1,501,400	1,629,000	(44,500)	1,584,500	192,900	1,777,400
DP Current Expense	101,000	289,500	264,500	318,800	365,000	(101,200)	263,800	1,400	265,200
DP Capital Outlay	65,700	32,200	0	0	0	0	0	0	0
Total	$7,397,300	$6,728,900	$6,538,800	$6,396,200	$7,242,400	($304,000)	$6,938,400	$331,900	$7,270,300

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Other Indicators	FY11 Actual	FY12 Actual	FY13 Actual	FY14 Actual	FY15 Approp	FY15 Revised	FY16 Approp
Budgeted FTE	118	117	111	111	111	111	111
Actual FTE	109.40	102.50	98	90.50	0	0	0
Vehicles	2	2	2	2	2	2	2

COBI contains unaudited data as presented to the Legislature by state agencies at the time of publication. For audited financial data see the State of Utah's Comprehensive Annual Financial Reports.