florida communication services tax implementation · florida communication services tax...
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Florida Communication ServicesTax Implementation
Jim Evers
Program Director,
General Tax Administration
850-488-5163
Agenda
l History
l Challenges
l Technology Solution
l Results
l Lessons Learned
l Questions
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History
l Florida Legislature enacts Communication ServicesTax Simplification Law (FL CST), effective10/1/2001
l Federal Government enacts MobileTelecommunications Sourcing Act (MTSA), effective7/28/2000
“The Law”
l FL CST - Centralizes the administration of state andlocal communication services taxes within the DOR
l FL CST - Includes a “safe harbor” for using an“approved” method of situsing customers
l FL CST - Requires monthly distribution of taxproceeds to jurisdictions
l MTSA/NACHA - Prescribe rules for situsing/taxingtransactions
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Challenges
l Groundbreaking law—First state to enact a law ascomprehensive as CST
l Consensus building—Industry, Local Governments,DOR, Constituents, Legislators
l Timeline—ITS design and development began in May2001, first returns filed in November, 2001
Challenges- New Law
l Interpretation
l Legislative deadline
l No model
l Potential for changes in the law
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Challenges- Consensus
l Taxpayers
l Communications Industry
l Municipal Governments (and their representatives)
l DOR
Challenges- Timeline
l Law mandated October 1, 2001 effective date
l Because CST was a “new” tax, DOR had no residentadministrative expertise
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Technology Solution
l GeoTax– Situsing database
– Tax rate inquiry
l e-Services– Web registration
– Web filing for taxreturns
– Information sharing
l SAP R/3 plus IS-PS-CA– Taxpayer registration
– Returns processing
– Financial/taxpayeraccounting
– Revenue distribution
Technology Solution - GeoTax
l Needed to situs where every customer of thetelecommunications service providers resides
l Every municipality was given the authority to enact adifferent rate
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Technology Solution - GeoTax
Technology Solution - GeoTax
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Technology Solution –e-Registration
l Provided taxpayers with option to register for newCST tax via the web vs. submission of paper form
l Data entered via e-registration was captured andloaded to SAP R/3 at conversion
Technology Solution –e-Registration
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Technology Solution – e-Filing
l e-Filing application developed and hosted by BSWAl Established jurisdictional profile upon first
submissionl Enforced tax computation business rulesl Electronic remittance of fundsl Tax return data captured and loaded to SAP R/3 for
processing
Technology Solution – e-Filing
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Technology Solution – e-Filing
Technology Solution – e-Filing
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Technology Solution-Information Sharing
l Law prescribed information sharingrequirements
l Local jurisdictions access DOR Internet sitevia a secure password protected logon
Technology Solution - ITS
l Project to design and implement an ITS for CST wasstarted in May 2001 and delivered in November2001
l First revenue distribution occurred in December2001
l Leveraged ITS for CIT
l Average $61mm monthly distribution to localjurisdictions since inception
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Technology Solution – ITSImplementation Timeline
Technology Solution – ITSTaxpayer Registration
l Register taxpayers
l Obligate taxpayers for CST
l Database certification
l Certification method determines collection allowance
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Technology Solution – ITSTaxpayer Registration
Technology Solution – ITSReturns Processing
l Filing methods (paper, web, EDI)
l Representation of the complex CST form in SAP R/3
l Business rules, tax computations, exceptiondetection
l Integration to taxpayer accounting (post verified/re-computed tax liability)
l Bill for deficiency
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Technology Solution – ITSReturns Processing
Technology Solution – ITSReturns Processing
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Technology Solution – ITSReturns Processing
Technology Solution – ITSReturns Processing
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Technology Solution – ITSReturns Processing
Technology Solution – ITSFinancial/Taxpayer Accounting
l Post tax liability, payments, and perform settlementl Manage account balancesl Age and escalate receivable collection via dunningl Manage delinquenciesl Issue notices, correspondencel All of the above were leveraged from CIT
implementation
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Technology Solution – ITSRevenue Distribution
l Revenue recipients (i.e., local jurisdictions)established as business partners
l Each jurisdiction has own “account”
l Ability to track allocation of tax liability vs. distributionof proceeds from tax
l Output file to State Comptroller for preparation ofchecks to local jurisdictions
Technology Solution – ITSSummary
l Heavily leveraged existing CIT ITS design previouslyimplemented
l New functionality developed in returns processingspecific to CST
l Standardized processes across multiple tax types
l Developed revenue distribution solution
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Results
l Increased compliance—combined filings
l Implemented an integrated accountingsystem
l Leveraged technology across theDepartment
Lessons Learned
l Facilitate Industry-Local Governmentcooperation and communication
l Resolve administrative/legal issues
l Adopt an Enterprise view
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Discussion
l Questions
l DOR Contactsl Jim Evers ([email protected])
l Gerald Johnson ([email protected])
l Grace Reeves ([email protected])
l Deloitte Consulting Contactsl Alan Krasner ([email protected])
l Rita Scoggins ([email protected])
l John Rampulla ([email protected])