Alabama mandates electronic tax filing

Alabama mandates electronic tax filing

The Alabama Department of Revenue this month launched an electronic tax filing service that is mandatory for 10 of the state’s 44 taxes.

Donald Graham, manager of the Special Projects Unit in ADOR’s Sales and Business Tax Division, said the state hired GovConnect of Cincinnati to provide the system. GovConnect is a subsidiary of First Data Corp. of Denver.

The project cost the state less than $2 million, Graham said.

“The cost savings are the primary benefit,” he said. “We are looking to save up to a million dollars a year” by adopting a compulsory electronic system.

“There are two different systems involved,” Graham said. “One is an Internet system, where you link off our site. … Then there is a telephone component.” Graham said the state had mandated electronic filing but had not mandated electronic payment except in cases where taxpayers owe $25,000 or more.

Both Internet and phone system filers receive written confirmation of their tax payments.

“We just implemented it October first,” Graham said. “We have had several hundred filers so far.”

Alabama and Minnesota are the only two states that have mandated electronic filing, Graham said. Minnesota also uses the GovConnect system.

“We have received some complaints …but virtually no opposition since the filing has begun,” he said. The revenue department has received some requests for waivers from the requirement, which it will grant in special circumstances.

“We are going to look hard at expanding the system in the future,” Graham said.

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