The Council on State Taxation issued the 7th annual Administrative Scorecard for 2019 evaluating state tax appeals processes and administrative practices. Since federal and state tax systems are premised on voluntary compliance, COST maintains that the fairer and more efficient a state tax system, the higher the rate of compliance. According to the Executive Summary:
It is a common truth that taxpayers will more fully and willingly comply with a tax system they perceive to be balanced, fair, and effective. Taxpayers operating in a system they perceive as oppressive, unfair, or otherwise biased are less likely to voluntarily comply.
The scorecard ranks states year-over-year. California was found to be most improved, while Texas and Kentucky received a nod for honorable mention. Colorado continues to bottom-feed with a D-score, despite initiatives underway to streamline and simplify state and local tax (SALT) compliance (see Briefing on Sales and Use Tax Reform in Colorado). Minnesota received a B-score, even though the Department of Revenue engages in the practice of disregarding certain Minnesota Tax Court opinions.
Read the report: Cost Scorecard: The Best and Worst of State Tax Administration (2019)
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Alex Korzhen can be reached at 763.703.5713 or akorzhen@taxops.com.
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