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NOT YOUR FATHER’S TAX DEPARTMENT: THE CHANGE WE NEED

NOT YOUR FATHER’S TAX DEPARTMENT: THE CHANGE WE NEED. Commissioner Kevin B. Sullivan Department of Revenue Services [ Revised 071514 ]. “Taxes…are dues that we pay for the privileges of membership in an organized society.” President Franklin Roosevelt

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NOT YOUR FATHER’S TAX DEPARTMENT: THE CHANGE WE NEED

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  1. NOT YOUR FATHER’S TAX DEPARTMENT:THE CHANGE WE NEED Commissioner Kevin B. Sullivan Departmentof Revenue Services [Revised 071514]

  2. “Taxes…are dues that we pay for the privileges of membership in an organized society.” President Franklin Roosevelt “I shall never use profanity except in discussing taxes.” Mark Twain

  3. TAX PRACTICE “In the tax-law boiler room, the motto is, ‘Anything worth doing is worth overdoing’.” Michael Graetz & Ian Shapiro, Death by a Thousand Cuts (2005)

  4. WHO IS DRS? • 650 employees (1/3 fewer staff) • Main office: 25 Sigourney Street, Hartford – relocation planned. • Regional offices: Bridgeport, Norwich & Waterbury. • Over 4 million tax returns annually. • Over 2 million taxpayer inquiries annually. • www.ct.gov/DRS

  5. Governor Dannel Malloy “If we always do what we’ve always done, we’ll always get what we always got.”

  6. Imposing Duties, Malcolm Sparrow • Compliance agencies must also be service agencies. Creating Public Value, Mark Moore • Government agencies need to add public value & engage public confidence.

  7. WORKING SMARTER • Automated collection scoring • Employee “Bright Ideas” • Web-based assistance, E-filing, self-service audits, payment plans • Sales tax permit renewals • Amnesty 2013 • External publications & policy advisory boards • Succession planning • Tax analytics • Virtual call-back • Operations concierge • LEAN business registration $500+ MILLION BENEFIT TO THE STATE

  8. CHANGING TAX PROFILE FY 1993 FY 2003 CURRENT Income 36% 44% 52% Sales & Use 32% 32% 25% Corporate 11% 5% 5% Motor Fuels 6% 5% 4% Cigarette 2% 3% 3% All Other Taxes 13% 11% 11% • Connecticut lowest business share of total taxes & tied for 2nd most favorable total business tax burden. Council on State Taxation (COST) 2013

  9. OCTOBER SURPRISE $193 million state tax amnesty

  10. APRIL SURPRISE Income tax volatility nationwide • January 2014 consensus revenue estimates increased • Income tax estimates & finals -7% ($221 million) down over YTD 2013 • Gift & estate tax -64% ($262 million) down over YTD 2013 • Federal “fiscal cliff” echo • Stock market “banking”

  11. SIGNS OF LIFE ? “Base” tax collections over YTD 2013 improving . . . • Withholding • Sales & use tax • Real estate conveyance • Petroleum gross receipts • Admissions & dues

  12. HOT TOPICS • Aerospace R&D credit reinvestment • Business apportionment uniformity • Expedited sales tax collection & publication of non-registered delinquents • Manufacturing reinvestment 100% donation exemption • Gift tax credit on estate taxes • No SOTS “going out of business” fee • Manufacturing apprenticeship credit pass-thru entities transfer • Regulations reduction • Clothing & OTC sales exemptions • Angel Investor credits extend thru 2016 • Teacher pensions • Cigarette enforcement

  13. HOTTERTOPICS • On-line sales • Expanded e-filing • Tax preparer liability • Tax analytics • $75M tax gap initiative • Tax Review Commission ?

  14. THE CHANGE WE WANT • “We have a business in Connecticut and I wanted to let you know that two talented people in your department have helped me get back on track. They have helped me understand that taxes do not have to be trouble but a good thing to keep us all honest. It’s nice to know that you don’t have to be afraid about calling DRS.” • “I just finished paying our sales tax on-line...I just wanted you to know that your system works great. It takes me about 4 minutes to get everything in and done. Good job! Whoever is working the system, maybe you can help the government with the new health care system.”

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