Electronic Tax Filing

Last year we passed legislation requiring businesses to file their tax payments and returns electronically. The intent is to save significant time and effort in the Department of Revenue (DOR) processing paper forms. This will also cut down on errors on both ends of the process. I believe we get to eliminate 14 positions as a result of this change.

I had a constituent express some concern to me about “allowing the DOR unfettered access to his bank account.” This is not an unreasonable concern, though the department did promise me they would smile while they stripped business bank accounts. In following up with the department I got the following response, which lays out 4 options in increasing distance from the department. I believe one of these options will work for almost everyone.

Overview
With the passage of SSB 5571, taxpayers who report their taxes on a monthly basis must file and pay their taxes electronically, beginning with their July 2009 excise tax return.  This new law was included in the state’s 2009-2011 budget this past legislative session and supports the Governor’s commitment to reduce administrative spending in state government.

Electronic filing significantly decreases taxpayer reporting errors, reduces paperwork handling, and lowers printing and postage costs.  As a direct result of these efficiencies, the Department of Revenue will reduce staffing in its returns processing centers by approximately 14 positions and save an estimated $1.2 million in fiscal year 2011. 

Payment options
Within the E-file application, there are four electronic payment options.   Only one of the four payment options require banking information be provided to the Department.  Below is information on the four payment methods. 

EFT Debit:
With EFT Debit, the taxpayer authorizes the department to withdraw the funds from their account on a day they specify, on or before the EFT due date.  The taxpayer must submit their electronic return, with EFT Debit selected as the payment method, before a payment can be processed.  When the return is submitted, the taxpayer is authorizing the department’s bank to withdraw the amount owed from their bank account.  To use the EFT Debit method, they must register with the department and provide their banking information.  The banking information is stored on an internal server (not on the web) and there is no cost to use this payment method.

EFT Credit:
If the taxpayer is not comfortable sending banking information to the department, they may sign up for the EFT credit option.  Once their return has been submitted, they must contact their bank and instruct them to send their payment to DOR.  The taxpayer must contact their bank each time a payment is to be sent to DOR.  Their banking information is not required and is not included in the information sent to DOR to identify their payment.  Please have your constituent check with their bank to find out if their bank charges a fee for this service.

E-check:
If the taxpayer selects E-check as their payment method, they are automatically transferred to US Bank’s E-check application.  The taxpayer enters their bank account and routing information into US Bank’s E-check application to make a one-time payment.  Their banking information is not shared with DOR when using this option.  They will be charged a one dollar ($1.00) fee for each transaction.

Credit Card:
If the taxpayer selects Credit Card as their payment method, they are automatically transferred to a non-state vendor’s payment application.  The taxpayer enters their credit card information to make a one-time payment.  They taxpayer may use Visa, MasterCard, American Express or Discover. Their credit card information is not shared with DOR when using this option.  They will be charged a 2.5% fee by the non-state vendor for this service.

About the Author

Ross
I am the Director of the Department of Early Learning for Washington State. I formerly represented the 48th Legislative District in the State House of Representatives, chairing the Appropriations committee and spent many a year at Microsoft.