Council on State Taxation Grades the States on Taxpayer Administration

December 16, 2013

The Council on State Taxation (COST) today released their new report (PDF) grading the states on taxpayer administration. A vital but often overlooked aspect of state tax policy, this includes what most people might consider the basics of good government:

  • Is there an independent forum (tax tribunal or tax court) to resolve tax disputes?
  • Can taxpayers challenge a tax assessment without first having to pay the alleged amount ("pay to play")?
  • Is the statute of limitations for taxpayers no shorter than the time the state gives itself to bring a case?
  • Is the interest rate the state charges on assessments no higher than the interest rate the state pays on refunds?
  • Do taxpayers have at least 60 days (preferably 90 days) to protest tax assessments?
  • Is the state tax return due no earlier than 30 days after the federal return, including the automatic federal extension?
  • Does the state make its letter rulings and administrative decisions publicly available?
  • Does the state avoid other administrative issues that negatively affect taxpayers, such as using contingent-fee auditors or prosecutors, retroactive penalties, onerous local tax administration separate from state tax administration, limiting appeals records to the prior record, and appointing unqualified personnel.

In this new scorecard, top honors go to Maine, Ohio, Alaska, Arizona, Kansas, Montana, and Pennsylvania. Pennsylvania in particular jumped up following concerted effort by their officials to improve taxpayer administration. California, Louisiana, Alabama, Colorado, Arkansas, and Nevada do poorly in the report.

Click on map to enlarge it. View previous maps here

Below is the table from the report, which you can read in full on COST's website.

Table: State Taxpayer Administration from COST Scorecard, 2013

An excel file of the data used to make this table is here.

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