In summer 2015, the Hawai‘i Department of Taxation launched an ambitious Tax System Modernization project that, over the course of five “rollouts,” promised to transform operations and better meet the rising expectations of taxpayers.
Now, with the completion of “Rollout 4” last November, the majority of state tax services have been migrated to the new tax filing portal, Hawai‘i Tax Online. Today, the new portal supports individual income, partnerships, estate, fiduciary, corporate income, franchise, general excise, public service company, rental motor vehicle, tour vehicle, car-sharing vehicle surcharge, seller’s collection, transient accommodations, use, and withholding tax types.
“While Tax System Modernization represents an ambitious initiative, it also stands out as one of the most necessary. The project is making progress in giving the state a more robust revenue engine and the technology needed to support it ... It is a worthy investment, as a modern tax collection system delivers what Hawai‘i taxpayers expect and deserve.”
– Christine Sakuda, THG Executive Director
The department reports that the project is currently on time and on budget, with Rollout 5 expected to be completed later this year. The last roll out migrates filing for retail tobacco permits, fuel, liquor, cigarette & tobacco, and liquid fuel retail dealers to the new systems.
Once all five rollouts are complete, the modernization project will have replaced the legacy tax processing systems. The ending result will be modernized, optimized and integrated tax systems with faster and more efficient processing. In addition, aging and “end of life” software and hardware will be phased out.
The new tax systems will provide better taxpayer service while improving enforcement of tax laws for equitable revenue collection. Additional benefits include enhanced online security (such as anti-identity theft tools), new e-filing capability, and online payment options that are free of surcharges.
When the Tax System Modernization launched, the Hawai‘i Department of Taxation projected that all five rollouts would be completed in 2019. Partial funding in the amount of $32 million was approved by the Legislature in 2013 to carry work through June 2018, which was approximately the halfway point of the project. The last rollout is expected to be completed this year, as planned.
- $9,033,841 – Rollout #1 (complete) – Imaging hardware and software replacement of aging and out-of-support IBML scanners; modernized e-file created state-owned gateway server to IRS; IVR and telephony hardware and software replacement of out-of-support IVR servers.
- $9,251,851 – Rollout #2 (complete) – Tax types migrated: general excise, transient accommodations, use only, sellers collection, rental motor vehicle and tour vehicle surcharge, county surcharge
- $9,423,335 – Rollout #3 (complete) – Tax types migrated: corporate income tax, franchise, public service company, withholding
- $9,656,942.10 – Rollout #4 (complete) – Tax types migrated: Individual income, partnership, fiduciary, estate and transfer
- $6,129,313.65 – Rollout #5 – Tax types to be migrated: Retail tobacco permit, fuel, liquor, cigarette and tobacco, liquid fuel retail dealer
- $5,349,800 – TSM Warranty Phase – One year warranty period (post rollout)
Current/Future Budget Requests:
- $2,146,770 (currently being requested) – TSM Post Warranty (FY21)
- $2,166,876* – TSM Post Warranty (FY22)
- $2,187,665* – TSM Post Warranty (FY23)
- $2,313,879* – TSM Post Warranty (FY24)
- $2,336,111* – TSM Post Warranty (FY25)
*Future budget request
Source: Department Dashboard, Office of Enterprise Technology Services, State of Hawai‘i
Learn more about features that are enhancing the way individuals and businesses interact with the Hawai‘i Department of Taxation online by clicking here.