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State Reaches a New Milestone with SUNTAX

The largest unemployment tax modernization in the country


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Abstract

In 1998, a large southern state's Department of Revenue (DOR) was coming to terms with a group of technologies that mired the organization in independent silos: 36 statutory taxes in the state were administered in over two dozen systems that had been developed in-house. Organizational efforts to cross-train staff and build a more efficient enterprise were coming to a hard stop against the limits of systems put in place sometimes decades earlier. While technical staff members were increasingly difficult to recruit, train and retain, taxpayer expectations for quick access to up-to-date information about their accounts was increasing, and costs to maintain antiquated systems were escalating.

The Challenge

The DOR executive director and director of General Tax Administration knew from experience that another custom solution would be obsolete before it was complete, and would not achieve their long-term objectives. As the fourth largest state in the country, they knew that the state required an innovative solution to handle the state’s $30 billion in annual revenue reliably while leveraging technological advancements and best practices from the private and public sectors. They also recognized that the solution would need to support the organizational and customer service improvements required to provide expected levels of service to their taxpayers. These initiatives formed the SUNTAX (System for Unified Taxation) project.

How We Helped

It was clear that in order for the state to support their annual revenue, provide superior customer service, and avoid costly rewrites as technology advanced, they would need to explore the Commercial Off the Shelf (COTS) Enterprise Resource Planning (ERP) software market. Though ERP packages had been supporting private sector processes on the same scale as DOR for years, using ERP to address government tax and revenue challenges was uncharted territory. To help them in their efforts to make sense of the packaged software options on the market, DOR turned to Deloitte Consulting LLP. The professionals of Deloitte Consulting have the deep experience, knowledge and skills required to help organizations like DOR in their efforts to navigate complex public sector systems and implement ERP projects. DOR, with help from Deloitte Consulting, put together a detailed list of requirements and invited the leading ERP vendors to respond. DOR chose SAP, and with the decision started a journey toward one of the most innovative solutions in the public sector today.

SUNTAX followed a unique approach for tax and revenue agencies: configuring a Commercial Off the Shelf solution that had been demonstrated as effective in the private sector to meet the needs of State revenue management. Leveraging Deloitte Consulting’s experience, knowledge and skills to help, DOR configured the system to meet the state’s requirements, and was able to benefit from SAP’s continual investments in research and development through upgrades and support.

In 2001, Corporate Income Tax went live. Following a carefully planned phased roll-out of the state’s taxes to ensure complete knowledge transfer and long-term maintainability, this was followed by each of the remaining taxes. By 2006, all of the legacy revenue tax types were in place, along with a tightly integrated Data Warehouse, Call Center, Bankruptcy Case Management, Collections Management and Online Services. In an ambitious effort to realize the full value of the system, Florida DOR launched the Unemployment Tax effort in 2006. The objectives were simple: to bring the same benefits they had realized by integrating master data, collections and other functions from the legacy taxes to Unemployment Tax.

Solution

Unemployment Tax went live in March of 2008. At that time, 900,000 accounts, 200 million wage reports, and five years of historical data were converted. Immediately, the state began to reap the benefits of an integrated system.

  • The agency developed queries to help in the discovery of under-filing and non-filing taxpayers by comparing accounts registered for Unemployment Tax with Sales and Corporate Income Tax.
  • When new legislation was proposed that would have changed the way Unemployment Tax rates were calculated, DOR was able to assess the impact of the change using the power of the new system in minutes instead of weeks.
  • Processes that took days to run in the legacy system were integrated with the overnight program schedule in SUNTAX, where they were completed in a fraction of the original time.
  • Users were able to view data quickly and replace their previous paper-and-calculator method for making decisions with more reliable and repeatable system-generated analytics. 

Since its launch, SUNTAX has helped state's DOR generate more than $800 million in increased revenue, a total return on investment of more than $10 for every $1 spent on the project. Between 2001 and 2004, collections increased by more than 300 percent. In fact, the additional revenue SUNTAX has helped the DOR realize each year more than covers the entire operating budget of the agency.

The cross-training and efficiency objectives that prompted the project at its inception have been more than realized. Where taxpayer service personnel could only provide information on one or two taxes in 1998, today every agent can help resolve issues brought by the taxpayer across all taxes, including Unemployment Tax, managed in the SAP solution.

Deloitte Consulting’s collaborative approach to providing services to DOR helped enable effective knowledge transfer across the project team. DOR resources have established themselves as knowledge specialists in all core areas and have evolved into leadership roles over the lifecycle of the project. Deloitte Consulting continues to provide services to DOR, especially with respect to DOR’s efforts in the assessment and deployment of new SAP releases and technologies, but ultimately, SUNTAX has become a system that DOR can extend, support, and upgrade on their own.

The results have not gone unnoticed—SUNTAX has been profiled in several industry publications, and delegations from more than a dozen states and 24 countries have visited DOR to see an example of leading practices for addressing the challenges of administering taxes in the 21 st Century.

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