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State speeds up excise tax processing

The Abercrombie administration has made significant progress in cashing general excise tax payments.

In July, the state Department of Taxation processed 72,754 payments within seven days, compared to just 219 payments within that time frame in July 2010. The department has made cashing the payments a priority after hearing complaints from the business community that it often took more than a month before payments were processed.

At an informational briefing Tuesday before the state Senate Ways and Means Committee and the state Senate Economic Development and Technology Committee, Abercrombie administration tax officials said they inherited a department that was highly politicized, had inefficient processes, and inflexible and outdated functionality.

The Department of Taxation processes more than 2.4 million tax returns a year, 70 percent that are filed on paper. Tax analysts hope to reverse the practice and have 70 percent of returns filed electronically by 2014.

The department also processes more than 1.7 million tax payments a year, 68 percent filed on paper.

Improving the efficiency of tax collections is one of the goals of the state’s broader information technology transformation.

Sanjeev “Sonny” Bhagowalia, the state’s chief information officer, told senators that the transformation would be done in seven phases over 11 years. He plans to present the state Legislature with a detailed plan by next July estimating the cost and the technology necessary to complete the transformation.

“The opportunity is right in front of us,” he said. “It’s not just money, it’s innovation.”

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