Water Excise Tax
The Iowa Department of Revenue's Water Service Excise Tax (“WET”) project began as a result of 2018 legislation which established a water service excise tax. Water was previously subject to sales tax. The Governor signed the legislation in January and the new tax had to be in place July 1, 2018. The work was completed by the mainframe programmers from Iowa’s Office of the Chief Information Officer (OCIO) and included a partnership with their outside vendor to update the Efile & Pay application. This new tax type not only required the development of a system but the submission and approval of Administrative Rules and the design of a new registration form. The project required interagency collaboration with the Department of Natural Resources to identify the targeted audience of Water Use Permit holders. The project was completed on-time and under budget.
This project involved programming a new tax from scratch into the state’s tax software. It involved both external and internal partnerships and it had a very short window of time for the outward (public) facing aspect of the project. In addition to building the system a new registration form was designed, and Administrative Rules had to be submitted and approved.
The Revenue and OCIO project team worked to fit this new tax type into existing structure with as few changes as possible and without increasing manual interventions. They took on a communication campaign, provided a well-attended webinar, wrote companion rules to the legislation, and programmed the mainframe application.
The public-facing phase was implemented July 1, 2018 and the internal system development for tax distributions was completed by February 1, 2019. The team explained the entire process in a one page form. The team created a Contact Us link at the top of the form that automatically pops up both an email and a phone call option. There is a Help Button located at the top right corner of every page to view questions and answers associated with that page. The compatibility of the browser the taxpayer is using is automatically verified right on this same form. The system was designed for quarterly filing. On a quarter basis there are 836 users.