Comptroller Online:
At Your Service
New law means more Texas businesses will report and pay taxes using Internet tools.
Texas taxpayers can choose from several online services offered through the Comptroller’s Web site, and more Texas businesses are expected to use them due to Senate Bill (SB) 377, passed by the 80th Texas Legislature.
SB 377 lowers the electronic-payment threshold, or the amount of tax paid before electronic payment or reporting is mandatory, from $100,000 to $10,000, and the electronic-reporting threshold from $100,000 to $50,000, for 12 different taxes.
“At first glance, there are more than 90,000 businesses that pay between $10,000 and $100,000,” says Art Earle with the Comptroller’s Electronic Reporting Division. As many as 25,000 of those already voluntarily file and pay electronically. Texas already collects nearly 90 percent of its taxes through electronic payment.
Electronic access roundup
The Comptroller offers 24-hour access to electronic reporting and payment tools – both online and by telephone – to save time, money and paper. The full list (below) is online at www.window.state.tx.us/services.
- WebFile
- TeleFile
- Electronic Data Interchange
- Electronic Funds Transfer (TEXNET, Web EFT or Web Credit Card)
- Licensed Customs Brokers Export Certification System
- Cigarette Delivery Sales Report
- Unclaimed Property Holder Reporting
SB 377 took effect June 1, 2007, but will require rules, policies and computer program changes before full implementation in January 2009. The Comptroller’s office will notify affected businesses when the change is in place, but awareness of the effective date will help taxpayers avoid penalties for late or incomplete filing and payment.
The Online Lineup
WebFile is the most widely used online filing and payment tool, with more than 730,000 returns filed and more than $51 million in paid taxes in fiscal 2007. It also meets the mandate for submitting a return electronically. Earle says WebFile most benefits businesses with 30 or fewer outlets, and advantages include reduced paperwork, automatic calculation of taxes due, online help screens and 24-hour access.
WebFile offers credit card payment options by American Express, Discover Card or MasterCard.
Of course, taxpayers can still use TEXNET and have their financial institution transfer funds to the Comptroller’s office, or pay by electronic check using WebEFT or by credit card. With WebEFT, taxpayers can set a payment date and have funds moved from their bank account. Returns must be filed by 11:59 p.m. CST on the due date, and late returns are subject to appropriate penalties.
More than 10,000 taxpayers use Electronic Data Interchange (EDI) to report seven different taxes. Larger companies and firms that file monthly or quarterly returns tend to use EDI, says Earle.
“The EDI software is good because it handles a lot of data and imports from Excel files, and can also be filled out in increments, which allows users to save their work,” he says. “They can save it and come back later and pick up where they left off.”
Texas businesses are required to file a tax return even if they owe no tax. Phone-based TeleFile is set up to handle those businesses. More than 53,000 returns were filed via TeleFile in fiscal 2007.
With confidential information in online exchanges, security is a major concern. A robust firewall system, encrypted transmissions and secure socket layers keep taxpayer data safe.
“In addition, users have to provide confidential password information to verify that they are who they say they are,” Earle says. “Our systems are constantly monitored to maintain the highest levels of security.”
The dozen to know
Businesses need to know the 12 taxes affected by Senate Bill 377 and the new $10,000 threshold that mandates electronic payment or reporting.
- State and local sales and use taxes
- Direct payment sales taxes
- Gas severance taxes
- Oil severance taxes
- Franchise taxes
- Gasoline taxes
- Diesel fuel taxes
- Hotel occupancy taxes
- Insurance premium taxes
- Mixed beverage gross receipts taxes
- Motor vehicle rental taxes
- Telecommunications infrastructure fund assessments
Stake Your Claim
The Texas Unclaimed Property Program has more than 8 million properties totaling more than $1.7 billion. This property comes from businesses, financial institutions, insurance companies, co-ops and any other entity that may hold abandoned financial assets for missing owners. These businesses and holders must report and remit abandoned assets in their possession to the state on Nov. 1 each year.
“Anyone holding abandoned financial assets beyond an established dormancy period of usually one to five years, depending on the type of property, has to report and remit that property to the state,” says George Tamayo, manager of Unclaimed Property. “It could be someone’s last paycheck, a utility deposit, commission checks, royalty payment or even the contents of a safe deposit box. There are about 100 different types of property that are reportable.”
The Comptroller offers a downloadable software program that allows a business to file an annual unclaimed property report, Tamayo says.
“We strongly encourage all businesses to file their report electronically if they have more than 10 items,” he says.
More than 13,000 reports containing about 1.2 million line items of property were filed between July 1, 2006, and June 30, 2007, with about 75 percent of those filed electronically. New users downloaded the reporting program more than 1,700 times between August 2007 and January 2008.
“The majority of the reports coming in use an electronic format, which reduces data entry and improves processing times,” Tamayo says.
When the reports are processed, the names of individuals with unclaimed property are added to the searchable database on the Comptroller’s Web site. More than 240,000 inquiries were made through the site in 2007, with almost $120 million in previously unclaimed property returned to Texans.
More information on unclaimed property is available at www.window.state.tx.us/up.
Customs Brokers
Texas licensed customs brokers use the Comptroller’s Web site for issuing certificates for refunds of Texas sales tax. When a person buys goods in Texas and takes them out of the country, they can get the sales tax refunded with a Customs Brokers Certificate.
“The system tracks all certificates issued by the Texas customs broker,” says Dale Lykins, a systems analyst for the Comptroller. “Even if the system is down for maintenance, they have a paper form they can issue to their customer. For the certificate to be valid, however, they must enter the information within 24 hours of the system coming back up. This is done to curtail fraud.”
As of December 2007, there were 45 licensed brokers in Texas who, along with their employees, were responsible for more than 1.2 million certificates totaling more than $97 million in refunded sales tax, all tracked through the online system. FN
Online shopping is a fast, convenient alternative to fighting the crowds, but it also means lost sales tax revenue for state and local governments. To learn about what Texas is doing to offset this and how it might affect you, go to Point, Click, Shop.