Download (PDF) Fiscal Fact No. 365: How Easy Is It to Find Tax Information on State Websites?
It’s April, which means Americans are rushing to finish federal and state income tax returns for 2012. Those who file a paper return rely on forms and rate tables posted online by the Internal Revenue Service (IRS) and state revenue departments. Even taxpayers who file returns with the help of paid taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. preparers or computer software may make use of instructional information provided on state websites. Employers, for instance, need to know 2013 tax rates now for withholding purposes.
Consequently, we decided to evaluate how easily available this information is on the websites of state tax agencies (often a revenue department, department of taxation, or tax commissioner). We conducted two tests in March 2013:
- We counted how many clicks it took to find 2012 income tax rates from the agency’s website homepage. In five states (Indiana, Kentucky, Minnesota, New Jersey, and North Carolina), it takes taxpayers five clicks to find this information from the homepage. Taxpayers in three states (Colorado, Massachusetts, and Pennsylvania) can get it in two clicks.
- We assessed whether the state had made available (and findable in a spot check by our analyst) the 2012 and 2013 tax rates, tax table, and tax forms. While nearly all states had most of this information, our analysts were able to find all of this information only in five states (Colorado, Illinois, Pennsylvania, Utah, and Virginia; some of these states have one-rate taxes, making tax tables unnecessary). The vast majority of state revenue websites do not yet provide 2013 tax rate information even though 2013 income tax is currently being withheld from taxpayers’ paychecks.
Transparency can be a difficult thing to quantify, and we admit that these two tests are not a perfect proxy. However, poor transparency of basic tax information imposes real costs on taxpayers. The time and money an individual spends complying with taxes prevents them from productively spending these resources elsewhere. Ideally, a taxpayer should be able to quickly and easily locate and understand all taxes owed and with that information make informed allocative decisions and budgeting plans.
We are consequently pleased to recognize the Colorado Department of Revenue, the Illinois Department of Revenue, the Pennsylvania Department of Revenue, the Utah State Tax Commission, and the Virginia Department of Taxation for passing both tests (three clicks or less for finding information and having all 2012 and 2013 information available online). We hope all state tax authorities will follow their lead in making basic information easily accessible to taxpayers. These five states have demonstrated a Committment to State Tax Information Transparency.
Table 1: Number of Clicks Required to Locate 2012 State Individual Income Tax Rates on State Website (as of March 18, 2013)
State |
Number of Clicks |
|---|---|
| Indiana | 5 |
| Kentucky | 5 |
| Minnesota | 5 |
| New Jersey | 5 |
| North Carolina | 5 |
| Alabama | 4 |
| Arizona | 4 |
| Iowa | 4 |
| Maryland | 4 |
| Montana | 4 |
| Nebraska | 4 |
| New York | 4 |
| Ohio | 4 |
| Oklahoma | 4 |
| Oregon | 4 |
| Wisconsin | 4 |
| District of Columbia | 4 |
| Alaska | 3 |
| Arkansas | 3 |
| California | 3 |
| Connecticut | 3 |
| Georgia | 3 |
| Hawaii | 3 |
| Idaho | 3 |
| Illinois | 3 |
| Kansas | 3 |
| Louisiana | 3 |
| Maine | 3 |
| Michigan | 3 |
| Mississippi | 3 |
| Missouri | 3 |
| New Mexico | 3 |
| North Dakota | 3 |
| Rhode Island | 3 |
| South Carolina | 3 |
| Utah | 3 |
| Vermont | 3 |
| Virginia | 3 |
| West Virginia | 3 |
| Colorado | 2 |
| Massachusetts | 2 |
| Pennsylvania | 2 |
Source: Tax Foundation analysis. States without an individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. are not listed.
Table 2: Availability of State Individual Income Tax Forms, Tax Rates, and Tax Tables on State Website (as of March 1, 2013)
State |
2012 rates/ tax rate schedule |
2012 tax table |
2012 form |
2013 rates/ tax rate schedule |
2013 tax table |
2013 Estimated Tax form/ voucher |
Total |
|---|---|---|---|---|---|---|---|
| Colorado | yes | n.a. | yes | yes | n.a. | yes | 6 |
| Illinois | yes | n.a. | yes | yes | n.a. | yes | 6 |
| Pennsylvania | yes | n.a. | yes | yes | n.a. | yes | 6 |
| Utah | yes | n.a. | yes | yes | n.a. | n.a. | 6 |
| Virginia | yes | yes | yes | yes | yes | yes | 6 |
| California | yes | yes | yes | no | yes | yes | 5 |
| Indiana | yes | n.a. | yes | yes | n.a. | no | 5 |
| Iowa | yes | yes | yes | yes | no | yes | 5 |
| Louisiana | yes | yes | yes | yes | no | yes | 5 |
| Maine | yes | yes | yes | yes | no | yes | 5 |
| Massachusetts | yes | n.a. | yes | no | n.a. | yes | 5 |
| Michigan | yes | n.a. | yes | no | n.a. | yes | 5 |
| Minnesota | yes | yes | yes | yes | no | yes | 5 |
| New Mexico | yes | yes | yes | yes | no | yes | 5 |
| North Dakota | yes | yes | yes | yes | no | yes | 5 |
| District of Columbia | yes | yes | yes | yes | no | yes | 5 |
| Arkansas | yes | yes | yes | no | no | yes | 4 |
| Connecticut | no | yes | yes | no | yes | yes | 4 |
| Hawaii | yes | yes | yes | no | no | yes | 4 |
| Idaho | yes | no | yes | yes | no | yes | 4 |
| Kansas | yes | yes | yes | no | no | yes | 4 |
| Kentucky | yes | yes | yes | no | no | yes | 4 |
| Maryland | yes | yes | yes | no | no | yes | 4 |
| Mississippi | yes | no | yes | yes | no | yes | 4 |
| Nebraska | yes | yes | yes | no | no | yes | 4 |
| New Jersey | yes | yes | yes | no | no | yes | 4 |
| New York | yes | yes | yes | no | no | yes | 4 |
| North Carolina | yes | yes | yes | no | no | yes | 4 |
| Ohio | yes | yes | yes | no | no | yes | 4 |
| Rhode Island | yes | yes | yes | no | no | yes | 4 |
| Vermont | yes | yes | yes | no | no | yes | 4 |
| West Virginia | yes | yes | yes | no | no | yes | 4 |
| Alabama | no | yes | yes | no | no | yes | 3 |
| Arizona | no | yes | yes | no | no | yes | 3 |
| Delaware | no | yes | yes | no | no | yes | 3 |
| Missouri | no | yes | yes | no | no | yes | 3 |
| Montana | yes | no | yes | no | no | yes | 3 |
| Oklahoma | yes | no | yes | no | no | yes | 3 |
| Oregon | no | yes | yes | no | no | yes | 3 |
| South Carolina | no | yes | yes | no | no | yes | 3 |
| Wisconsin | yes | no | yes | no | no | yes | 3 |
| Georgia | no | no | yes | no | no | yes | 2 |
Source: Tax Foundation analysis. States without an individual income tax are not listed. For tax rates or tax schedules, states marked “yes” make the information easily available on a webpage. States are marked “no” if they only provide this information within a tax form, within the tax form instructions, in a departmental newsletter, or within a statutory code excerpt.
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