Pennsylvania stopped taking payments last month on its 22-year-old E-Tides online tax filing system and marched the last business taxpayers to its replacement — myPATH, as in My Pennsylvania Tax Hub, which aims to simplify the filing of multiple state business taxes.
how are you doing The state and leaders of tax-professional groups say it’s an improvement. But some users and tax professionals say the transition hasn’t been easy.
Warren Hudak, a suburban Harrisburg CPA who heads the Pennsylvania Society of Enrolled Agents, which pushed to overhaul the old system, has found no “systemic problems.”
His group of tax practitioners long complained that the old E-Tides system was complicated and labor-intensive. He described myPATH as offering “welcome changes – more transparency, more accuracy, transcripts come faster and they approve [tax payments] as they go.”
Blake Shelhamer, who runs a jewelry store in Peddler’s Village in Bucks County, said he never had a problem with the old system, “but with myPATH, they took my money but didn’t apply it to my bill.”
After waiting three hours on a state phone line and 40 minutes on a second line, “they said it’s a widespread issue, but there’s nothing they can do. I’m going to have to file an appeal,” Shelhamer said. “Even though I have confirmation that I paid, they’re still reporting me as delinquent and assessing fees.”
To be sure, hundreds of thousands of individual taxpayers have used myPATH for personal income tax and property tax deductions since it began processing those returns in 2019, two years after Colorado-based Fast Enterprises LLC was contracted to install myPATH. Fast is also behind the GenTax system that serves as a model for more than half of the US states.
“Some Weird”
As of November, at least 17 of Pennsylvania’s business taxes — including undercover booking agent, consumer fireworks, wine excise, minor gambling and single cigarette taxes, as well as ordinary gross receipts, employee withholding and corporate net income taxes – had been added before the final mandatory passage on February 24.
Department of Revenue spokesman Jeffrey Johnson credited a public information campaign with quick acceptance by most of the more than 400,000 business taxpayers who used the old system.
“What we’re hearing is a mixed bag,” said Mitchell Gerstein, senior tax advisor at Isdaner & Co., certified public accountants in Bala Cynwyd. “We’ve received a lot of feedback from customers who have struggled to migrate their data from E-Tides to myPATH.”
When a taxpayer is properly connected, the new system is “user-friendly,” with plenty of deadline reminders, Gerstein said. But filing employees’ annual W-2 tax forms — in a place that’s hard to find in the system and where it’s harder to confirm the data is accurate — has stumped some users.
When payments go wrong, troubled taxpayers and professionals turn to unresponsive online messaging and appeals systems. With all the calls piling up, “it’s almost impossible to get through to anyone at the Pennsylvania Department of Revenue,” Gerstein said.
Hudak also acknowledged that “there are still some quirks,” including data issues. But he compared the Revenue update favorably to past IT controversies in Pennsylvania, such as the failed IBM computer system that resulted in the settlement of a state lawsuit for $33 million two years ago.
“Digital transformations present challenges,” PICPA, the state association of CPAs, said in a statement, adding that the Department of Revenue was responsible. “Overall, most of our members have found the transition to be a relatively smooth experience.”
What did $121 million buy?
Like banks and other early adopters of computer technology, Pennsylvania struggled to integrate with a string of legacy computer-based tax systems built separately for 25 different taxes. E-Tides was built by state employees and appeared in 2000.
The state’s early tax technology was based on the now-obsolete COBOL programming language, which did not allow information to be shared across tax systems for multiple taxpayers who paid more than one type of tax. Employees had to manually compare and add the results.
In 2010, the Rendell administration awarded Accenture, the national consulting group created by former accounting firm Arthur Andersen, a $52 million contract to build a unified system. Revenue spokesman Johnson said the state eventually paid Accenture $44 million, including ongoing support.
But under Gov. Tom Wolf, who led the Department of Revenue that hired Accenture, officials realized they would have to do more for users than simply consolidate legacy systems, Johnson added.
In 2017, the state selected Fast Enterprises to install an online tax system that could be accessed remotely from PCs and mobile phones.
“The Department of Revenue took what Accenture had built and incorporated that business tax system” into the software platform Fast built, Johnson said.
The myPATH contract, initially for five years, renewable in one-year installments, has paid Fast $77 million so far, according to Johnson. Individual taxpayers began accessing the system in 2021 and were granted contract extensions to add business taxes.
From November, when the first online business returns were accepted on myPATH, to mid-February, the Department of Revenue said that just over 90% of business taxpayers who had used E-Tides had switched to myPATH.
Having spent $121 million so far to consolidate tax systems and make them more user-friendly, the department said the new system will save $9.6 million over the next 10 years compared to operating the old system. old. The value of the benefit to taxpayers and professionals has not been assessed.
