Tax system upgrade kept in-house

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"Tracking taxes"

Pennsylvania's Department of Revenue is taking on the job of integrating its own tax systems as a way to save millions of dollars, get the job done right and keep a constant customer focus.

The department, which is responsible for collecting more than $20 billion for the commonwealth, first plans to roll out a modernized corporation tax system by December 2003.

"After that, we will need to do a conversion of our sales and employer [tax] systems, which are poised for that conversion at this moment," said Lyle "Skip" Koons, the department's director of information systems. "But we wanted to do the most difficult tax first because, frankly, we thought if we can do that one, we can do the rest of them."

The Keystone Integrated Tax System (KITS) actually was implemented in late 1997 by an outside integrator. This project, called KITS II, is being undertaken by department staffers themselves. Approaching its second year in development, KITS II is a major software and hardware upgrade using IBM Corp.'s WebSphere.

"We're doing that internally because of the experience that we had with basically the last delivery of that species," Koons said. "There are a number of good integrators in the country. But our experience has been, in Pennsylvania at least, that a transfer solution has not worked."

Staff knowledge of Pennsylvania's "very interesting tax code" is an advantage in creating a flexible system, he said, adding that the department is examining its business processes in its taxing bureaus. Another advantage is saving money.

"In terms of staff and resources, we believe when it's complete we will have less than $4 million invested," Koons said. "As integrated tax systems go, I think a minimal delivery would be somewhere in the neighborhood of $15 million" to have the work done by an outside integrator.

The department (www.revenue.state.pa.us) will subcontract some specialized work, "but generally speaking, we're the architects, we're the designers, and we would be ultimately responsible," he added.

Within the past two years, the department has completed several projects aimed at better customer service for individuals and businesses. One such effort is e-TIDES (Electronic Tax Information and Data Exchange System), which enables business owners to register to file taxes electronically, said Koons, who added that 50 percent of new registrations are now done electronically. Business representatives also can view their account status via the Internet.

Another effort has been to make images of documents so that employees in the main office and 42 remote locations can call up returns and other tax documents via a Web browser.

KITS II will further those efforts.

"When that finally gets implemented in its final form, what we'll see is a tax system that collects all of those taxes — the corporation taxes, the sales tax, the employer tax, the individual tax — and we can do things like react to legislative mandates in a much quicker fashion, in a much more accurate fashion," Koons said.

Customers "will be able to go in, in the future, and see the status of all their accounts provided they're registered to be able to do that," he added. "And they'll be able to talk to one of our tax examiners or one of customer service representatives and hopefully we'll able to resolve most of the interrogations in the department on the first cut."

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