Governor Signs Law for Tax Hearings Outsourcing Tax Refund Payments

On May 26^th 2011, Governor Fallin signed SB 123 into law. This bill includes provisions related to the Tax Commission for increased compliance for sales, use and income taxes. Included are initiatives for additional hearings related to issues regarding remittance of sales and use taxes, additional auditing personnel for sales and use tax enforcement and additional audits of corporate and partnership income tax returns. Additionally, the measure provides for the use of direct deposit and card-based disbursement systems in lieu of checks or warrants for the issuance of income tax refunds.

The Oklahoma Tax Commission may use a direct deposit system and card-based disbursement system in lieu of checks or warrants for the purposes of issuing refunds for overpayment of individual income taxes.  Notwithstanding the provisions of Section 205 of this title, the Tax Commission may enter into a contract with, and release taxpayer information to, entities deemed to be qualified by the Tax Commission to implement the card-based disbursement system.  The Tax Commission shall not release to any entity contracted with pursuant to this section the full social security number of taxpayers opting to receive a refund through the card-based disbursement system.

Estimates by the Tax Commission indicate the implementation of the initiative to increase tax compliance will result in an increase in collections. Specifically, the addition of sales and use tax auditors will increase collections by $3.5 million, the income tax audit effort will yield $4.0 million and the additional hearings for sales tax permit holders will result in collections of $11.8 million.

Implementation of the direct deposit and card-based refund system will result in estimated administrative and processing savings of $500,000.

There is concern that sending the information may cause unintended problems with our personal information as reported earlier.