Haas touts quicker, simpler tax collection

Very few people get excited about taxes, especially when April 15 rolls around.

June Summers Haas, though, is downright enthusiastic about her job as chief tax collector for the State of Michigan.

As commissioner of revenue, Haas directs the 800-person Bureau of Revenue - the state equivalent of the IRS - which collects more than $22 billion annually through 23 different taxes. She advises the governor and state treasurer on tax policy and heads enforcement efforts.

“The issues we deal with are so interesting,” she said. “There’s so much to do. And a lot of it’s fun.”

She gets especially excited about the way technology is transforming tax collection.

More than one million Michiganians filed their personal income tax returns electronically last year, and the bureau is on track to see 20-percent growth in that number this year. Many additional returns are submitted with a computer-generated barcode (similar to a UPC) that encodes all the information on the return so it can be scanned rather than entered by hand.

These technologies have made processing faster, cheaper and more accurate, said Haas. An e-filed return can be processed in seven days, and the taxpayer can receive a refund immediately through direct deposit. Bar-coded returns can be entered at a rate of 400 per hour rather than 30 to 40 per hour.

And with electronic transmission, there’s no risk that Treasury employees will inadvertently introduce an error when entering the data.

“The costs have gone down,” Haas said. “It’s easier to input the information, and the accuracy rate is 100 percent.”

Plans are underway to implement electronic filing for Single Business Tax returns in 2003, bringing businesses the same advantages enjoyed by individual e-filers.

“We think this will be a tremendous boon to businesses as well as to us for processing,” Haas said.

Retailers already submit sales and use taxes electronically, and business owners who don’t owe SBT can file that form online. The bureau plans to expand electronic submission to include motor fuel and tobacco taxes. Haas is seeking information from business owners about what other services they would like to have available on the web.

“Michigan is a leader in this area for business,” Haas said.

Michigan’s elimination of the Single Business Tax also marks the state as progressive in the area of business taxation, Haas said. Since no replacement for the SBT is planned, final repeal will make Michigan one of a handful of states with no corporate tax.

“It’s a tremendous incentive for businesses to locate in the state,” she said.

Making incremental reductions in the tax over a 20-year period was a wise strategy, Haas noted, since the tax brought in $2.3 billion - more than 10 percent of state revenue - in 1999, the year before the rollback began.

“The only way to eliminate a tax that brings in that much money is to phase it out gradually,” she said.

Haas strongly supports the Streamlined Sales Tax Project, a group of states working toward better collection of use tax on out-of-state purchases. MRA has long advocated improvements in sales and use tax collection to level the playing field between Main Street retailers and catalog and Internet sellers.

The project focuses on simplifying state sales tax laws to encourage out-of-state retailers to voluntarily collect the tax.

“The state has always been concerned with finding an appropriate mechanism for collection of use tax,” Haas said. “Clearly the tax is due, but it is difficult to collect from the consumer without being intrusive. If we can find a way to take the burdens of collection off the vendors, that will give them an incentive to collect the tax.”

The states participating in the project hope to finalize simplification requirements by the end of September. Michigan would then have to pass legislation by December 31 bringing its tax code into compliance.

Michigan’s sales tax system is already fairly simple, so only minor changes will be necessary, such as in definitions of taxable items.

“Much of our law already conforms to the terms of the agreement,” Haas said.

At least five states must sign on to the plan for it to take effect. Retailer participation is voluntary, but tax remittance under the plan would be easier for multistate retailers.

Some $240 million in Michigan use tax goes uncollected each year. But the project’s goal is to reduce the difficulty of compliance for all retailers rather than to dramatically increase state revenue, Haas said.

“We’re not looking at success in terms of money,” she said. “We’re looking at this as a way to make the collection and submission of sales tax easier.

“Government should seek to make the burdens it imposes on the business community as light as possible. If we truly make the burdens lighter, retailers will come forward.”

Having worked for many years in private practice in tax planning and litigation, Haas seeks to keep the taxpayer’s perspective in mind. She has established Commissioner’s Advisory Groups composed of businesspeople to review new regulations before they go into effect. MRA Chairman and CEO Larry Meyer serves on one such group.

“Policy is best made with input from the business community,” Haas said. “We have to be sure not to get in the way of business.”

Though she loves her work, Haas also carves out time for family, especially her husband and two-year-old daughter, who was born just weeks after Haas was named acting revenue commissioner in 1999.

“I do a lot of balancing between my job and my home life,” she said. “This is a job that’s so interesting. But I know I have to go home at night, because I have a little girl who wants me to read her stories.”

Return to April Michigan Retailer Page one