It used to take as long as 10 days for tax payments to clear. Businesses would send withholding and sales tax payments through the mail. A check received by the R.I. Division of Taxation would then be batched and entered into a database, then sent to a cashier to be added to a deposit that would then go to the bank.
But there is change afoot. More than 8,000 of Rhode Island’s roughly 33,000 business tax payers are now filing payments electronically through a portal on RI.gov, the official state Web site, called Business Forward, said Renee Loring, marketing director for the site.
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Thousands more pay by electronic funds transfer (EFT), which is required if a company’s tax liability exceeds a certain amount.
Payments through RI.gov now account for 24 percent of total business tax payments in the state, Loring said. They’ve increased more than sevenfold from 2003, when the service was launched, and 2005, and the number is still growing.
State Tax Administrator Dan Clemence said the online service has streamlined the processing of tax payments, especially for small to medium-sized businesses that don’t use the electronic funds transfer system.
Benefits of RI.gov’s tax filing services include reduced processing costs for the state, faster updates to taxpayers’ records and improved accuracy of tax records, Clemence said.
“We have also eliminated errors in posting because fewer hands are used to process these payments,” Clemence said. “We are able to process all the transactions we receive through the portal with almost no user intervention.”
In addition, Clemence said he’s noticed more business tax payments are filed on time due to the ease of filing electronically. Businesses can schedule payments for the same date every month.
RI.gov has processed more than $1 billion in tax payments through the site, which Loring said is a notable accomplishment in such a short period of time.
The Web site is maintained by New England Interactive, a subsidiary of NIC Inc., which designs, manages and markets eGovernment portals for 18 states and hundreds of local governments and had revenue of about $60 million last year.
Though several states offer electronic filing for business taxes, Loring said, “Rhode Island stands out from the rest by offering almost 60 different tax types that can be filed and paid through the Web.”
Businesses can pay daily, weekly, monthly, quarterly withholding taxes, monthly and quarterly sales and use taxes, consumer use taxes, insurance premium taxes, motor vehicle fuel taxes, cigarette stamp taxes, public service gross earnings payments, corporate taxes, hotel taxes, monthly and quarterly meals and beverage taxes, and more.
“We’d like to create an additional tax service that would enable very large businesses to file multiple taxes in one session using a Web service,” she said.
The online tax service has exceeded RI.gov’s expectations, she said. H&R Block has estimated that e-filing of personal income taxes nationwide increased by 8 percent within the last year. Rhode Island electronic business tax filings nearly doubled in the same time frame.
“The percentage increases year after year are testament to the service’s success,” she said.
