Web Critic – State Tax License Services on the Web – A Two Way Street

Attorney and author Kathy Biehl practiced law privately in Houston, Texas for 18½ years before relocating to New York City in 1998. She has taught legal research and writing at the University of Houston Law Center and business law at Rice University. A member of the State Bar of Texas, she earned a B.A. with highest honors from Southern Methodist University and a J.D. with honors from the University of Texas School of Law, where she was a member of Texas Law Review and Order of the Coif. She is co-author of The Lawyer’s Guide to Internet Research (Scarecrow Press, Nov. 2000), with Tara Calishain.

Web Critic evaluates legal research Web sites in terms of the information they convey, how effectively they convey it and how well they take advantage of the possibilities of the Internet — or don’t .

It’s become common for government agencies to post routinely requested information, forms and applications on their Web sites. There’s little reason to phone or send someone to an office if you can get what you need on the Internet, and outside normal business hours at that.

What if you could do even more? The possibilities have inspired a few agencies to turn the convenient flow of information online into more of a two-way street. The area of state tax licenses has spawned several examples that demonstrate the interactive potential of a home page — and the variety of approaches that Web designers may take.

An aside at the outset: Few of the flaws that I raise are not likely to pose problems for a legal professional whose practice creates and represents business entities. They may for clients, however. If you represent small business owners who prefer to handle some of the groundwork themselves, it would be prudent to understand these sites (shortcomings included) before sending a client to them.

Texas: Sales Tax License Application Forms in PDF

The Comptroller of Public Accounts for State of Texas illustrates the first step towards interactivity. This office has set up its sales tax license application forms in an Adobe Acrobat format that allows the reader to fill them out online. Instead of printing the form and then filling it out by hand or with a typewriter, you type answers onto the screen. When you print the document, it’s ready for signing and submitting.

While it’s still necessary to file the completed application physically (either by mail or in person), this feature does make the process easier, at least on a psychological level. Even if Texas chooses not to move into online filing, its approach has room for improvement in another area – and that would be disclosing at an earlier point in the site that it’s possible to fill the form out online. In the current design, this possibility is a pleasant surprise that greets visitors once they reach the appropriate application.

New Jersey Business Gateway Services

New Jersey’s Division of Revenue has adopted a far more interactive approach with its New Jersey Business Gateway Services. From this one simple index it’s possible to take a number of significant steps toward launching a new business.

The second step is obtaining the forms to create a business entity. They’re in a self-evident place, under Forms, Fees & Instructions, as well as under the NJ Business Registration Packet link; look for the Commercial Recording entry in the chart. Actually creating the entity is one of the few steps that can’t be done online; that requires a paper filing, either by mail or in person.

Finally, the site accepts the required initial registration with the Division of Revenue for taxes and employer contributions for unemployment and disability. This process entails filling in a series of online forms that ask questions about the proposed business activities, on the basis of which the Division of Revenue will select and mail the appropriate forms and tax returns. The page does not give a preview of the forms, though; you have to start the process to learn what information you need to provide.

If there’s any shortcoming in this forward-looking site, it’s periodically losing sight that not all visitors are knowledgeable, pre-existing business taxpayers (or tax professionals). The site does not spell out the required steps for launching a business or give an overview of its services that has meaning to the first-time visitor. The About This Site page dispenses with the overview in a vague sentence and concentrates on an elaborate technical discussion of changes that the online initiative is bringing to filing and practice and forms There’s no help in using the site in the FAQ (which answers technical questions about filing specific forms) nor on the Common Problems page (which outlines recurring errors that affect specific tax forms). Like much of the site, both presuppose familiarity with New Jersey’s revenue system. If the occasion arises to refer an inexperienced client to this site, explain what to look for first.

Massachusetts: The Department of Revenue and Online Filing

Massachusetts illustrates that the ease of online filing can be combined with extensive explanatory information on the Bay State Business Connection Doing Business Page. Unlike in Texas and New Jersey, this page is not a project of the tax agency, but instead includes the Department of Revenue in its scope. The page is a springboard for creating and registering a business entity — and understanding the obligations these actions entail.

The Business Page headings (which have succinct but sufficient descriptions) include a guide to starting a business, written by the Massachusetts Office of Business Development; a Department of Revenue guide to tax and employer obligations; and information about other obligations, such as enforcing child support, state and federal occupational safety requirements.

Two registration links are also in the index. For creating a business, the page points to the Secretary of State’s Corporations Division site, which posts information and forms for the possible fictitious entities. This page pops up in a separate browser window. (In the list of resources it’s hard to see that “Information” and “Forms” are separate links; a slash or more space between the words would make this clearer.) Massachusetts does not follow New Jersey’s tact of offering the option of verifying name availability online, at least not for free. Although it’s not explicitly mentioned, this information falls within the scope of the database available through the Secretary of State’s subscription service Direct Access.

Return to the previous browser window to reach the second registration link in the Business Connection index. This leads to the Massachusetts Department of Revenue Online Service Center, which allows businesses to register online for a variety of taxes, such as sales and use. (It will also appear in a separate browser window.) This center is an exemplar of full disclosure. It gives fair warning that it uses a secured server and requires a Web browser that supports 128-bit encryption. It provides instructions that preview the questions in the online forms and explains how to answer them. It also supplies a checklist of specific information that will be necessary to complete the forms. (Printing out the instructions and checklist would be a good idea.)

The center assumes that the visitor already has a business entity or knows how to create one. If a prospective business owner starts at the Service Center (which is possible because there’s a direct link to it from the Business Connection’s home page), it will have to figure out how to get entity creation forms. It would be helpful if the Links page expanded slightly beyond its revenue focus and added the Secretary of State and the Business Connection. It would also be helpful if the Business Connection obtained reciprocal links back from the sites (within Massachusetts) to which it points. If it did, someone who heads straight to the Secretary of State to download forms, for example, could have notice of other available online resources for setting up a business.

That addition is the only possible improvement (and extremely minor at that!) I can suggest. Because of its attention to explanation, the Back Bay Business Connection Doing Business Page has made its interactive resources equally accessible to lay people and professionals.

Copyright © 2000 Kathy Biehl

Posted in: Tax, Web Critic