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Franchot launches tax processing system

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Peter Franchot, state comptroller, demonstrates Maryland’s new tax processing system.

Maryland Comptroller Peter Franchot announced the launch of the first phase of a new state tax processing system in July, modernizing and streamlining how taxpayers conduct business with the agency.

The initial phase of the $160 million Compass system focuses on alcohol tax collection and license renewals, using automation and condensed forms to save taxpayers time and allow faster customer service.

Compared to the agency’s outdated system, “[this] will make it easier for taxpayers to view and manage accounts online while enabling us to process tax returns more quickly and protect against fraud more vigorously,” Franchot said.

The rollout comes in the midst of the COVID-19 pandemic with a majority of state employees working remotely.

“The Compass team did an amazing job transitioning from an on-site buildout to one that was developed remotely, with almost no warning or notice,” Franchot said. “Employees and contractors embraced virtual technology and were able to troubleshoot any problem spots through careful collaboration. I can’t speak highly enough about the team’s efforts to get the first phase launched on time and on budget.”

Expansion Plans

Compass will continue to be implemented over the next several years, with corporate taxes scheduled to launch in the first quarter of 2021, followed by business taxes and individual income taxes in 2022, which is when most taxpayers will be impacted.

In addition to enhanced fraud detection and providing a one-stop online platform for doing business with the Comptroller’s Office, the system features best-practice security standards and maximized audit, collection, reporting and estimating functionality.

“The new system replaces an antiquated tax processing system that dates back to the 1970s and reflects an acknowledgment that we needed to upgrade our systems to more efficiently serve the public,” Franchot said.

Approved by the Maryland Board of Public Works in December 2018, the first phase was completed and fully operational within 18 months.

Enhanced Functionality

Developed by Revenue Systems Inc. (RSI) of Massachusetts, Compass allows government agencies to innovate and build efficiencies through transformative technology.

Franchot said, “Our agency’s Compass system is a unique, state-of-the-art tax management platform.”

According to Jeff Kelly, director of the Comptroller’s Field Enforcement Division, enhancements include form markings that will allow Compass to identify each form and the fields of data it needs to capture.

“Data will be stored in a more stable environment and less subject to human error in data entry or corrupted Excel files,” said Mike Binnie, assistant program manager for the Compass project. “It will give us better tracking and lookup capabilities.”

Historic data prior to July 2020 will not be available on the system but will be maintained by the Comptroller’s Office in another form.

“We’ll eventually have a portal for users to enter their account and apply for things, change data on licensing, submit reports and make payments online,” Kelly said. “A lot of it will be drag-and-drop type features, but we’re a couple of years away from that.”

Additionally, the system will be capable of sending automated notices for license renewals and other important reminders and will allow users to download electronic copies of correspondence and notices, submit service request to inquire about tax matters, and delegate access to authorized parties.

“Our notices have also gone through a plain language review process,” Binnie said.

Critical Eye

Franchot, who has announced his plans to run for governor in 2022, said many technological aspects of state government are also outdated.

“We are always looking for ways to modernize our systems and share best practices [among] departments and programs,” he said. “Modernization doesn’t have to be complicated or high tech, and it certainly doesn’t have to carry a high price tag.”

By George Berkheimer | Senior Writer | The Business Monthly | August 2020 Issue

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