SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

SENATE, No. 489

with Senate committee amendments

STATE OF NEW JERSEY

DATED: JANUARY 29, 1996

      The Senate Budget and Appropriations Committee reports favorably Senate Bill No. 489 with amendments.

      Senate Bill No. 489, as amended, changes current law concerning the written verification of gross income tax returns so that such returns may be filed by telephone using a touch-tone telephone keypad.

      Current law requires a gross income tax filer to certify the accuracy of the gross income tax return by signing his or her name under penalty of perjury. This signature represents the taxpayer's oath that the information contained in the return is accurate and that no intentional attempt has been made to defraud the State.

      The purpose of this bill is to permit the Director of the Division of Taxation to promulgate regulations that will allow the use of voice signatures and other technologies, as they evolve, to satisfy the signature requirements of the gross income tax.

      The division has already embarked on a pilot program for which approximately 275,000 taxpayers in 12 counties have been selected to file their 1995 gross income tax returns by telephone between January 16 and April 15, 1996. Using a touch tone telephone and following the recorded instructions, a selected taxpayer may enter the necessary information and have the tax automatically calculated by computer. A taxpayer using this system may receive a refund more quickly than if a paper return had been filed. The division anticipates that approximately 1.3 million taxpayers may be afforded an opportunity next year to file their tax returns in this manner.

COMMITTEE AMENDMENTS

      The committee amended the bill to make it retroactive to January 1, 1996, so that there would be no question as to the legality or accuracy of 1995 gross income tax returns filed by telephone under the pilot program already begun by the Division of Taxation. In addition, the committee amended the bill to emphasize that the signature of a tax filer, whether in writing or by telephonic or electronic means, is needed to certify to the truth of the contents of a tax return.

      The Division of Taxation supports the amendment.

FISCAL IMPACT

      The fiscal impact of this bill cannot be estimated at this time; however, the Division of Taxation may incurr some additional expenses for the conversion from the current method of processing gross income tax returns to a telephone filing system. In the long term, the division may experience a reduction in processing costs as more taxpayers are permitted to change their method of filing from paper returns to telephone or other electronic means.