Hawaii's Taxation Department Signs 'Benefits-Funded' Contract to Smooth Tax Process

Hawaii's Department of Taxation signed a five-year, $50 million contract with American Management Systems Inc. to field an Integrated Tax Information Management System (ITIMS) to improve taxpayer service and collection efforts.

The contract is "benefits-funded," meaning that the vendor receives payment only after the system is operational, which eliminates the need for change orders and other added costs found in traditional information technology procurements, said Ray Kamikawa, the state's tax director.

"Benefits funded also ensures that the hardware, software and [bureaucratic] changes, including training, are accomplished and work in an integrated fashion across tax types and functional lines," Kamikawa said.

ITIMS will identify people and businesses currently under-reporting or not filing taxes and will fund itself through those increased revenues, allowing the system to be installed at no cost to Hawaii taxpayers, according to Kamikawa.

The state made it clear from the beginning that it was seeking an innovative solution, said Marie Okamura, deputy director for Hawaii's department of taxation. "Even through the RFP process, we stated what problems existed and what we'd like to do, but we asked the vendors to propose the solution," Okamura said.

ITIMS will integrate the mainframes that currently powers the taxation department's operations with AMS' Computer Assisted Collections System for Government, an automated case management and workflow system that aids collection and audit efforts.

Once complete, the project is expected to generate an additional $157 million over seven years.

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