OKLAHOMA TAX COMMISSION

MISSION STATEMENT
To serve the people of Oklahoma by promoting tax compliance through quality service and fair administration.

THE COMMISSION
The Tax Commission consists of three persons appointed by the Governor of the State of Oklahoma by and with the consent of the State Senate of the State of Oklahoma. No more than two members of the Tax Commission shall be, or shall have been , within the previous six months prior to appointment, members of the same political party. The Commission members serve six-year overlapping terms. The three member Commission is a full-time policy making and judicial body ultimately responsible for the administration of the tax laws of the State. The Commission employs an Administrator who is responsible for the administration of the day to day operations of the agency.

DUTIES / RESPONSIBILITIES
The Tax Commission as an agency administers the collection and distribution of some 60 different taxes, licenses and fees. It is the Tax Commission's statutory duty to apportion such revenues to the various state funds and to allocate directly to local units of government certain state-collected levies ear-marked to counties, school districts and municipalities. Under contract with individual municipalities, the Tax Commission is responsible for the administration, collection and distribution of local sales tax levied by the cities and towns of Oklahoma. The organizational make-up of the Agency includes four separate tax administering divisions and five support divisions. The revenue administering divisions of the Tax Commission are Ad Valorem, Income Tax, Business Tax and Motor Vehicle. The support divisions include: Management Information Systems, Collections, Legal and Management Services.

STATUTORY REFERENCES
Title 68, O.S. 1981, Section 101, et seq. of the Oklahoma Statutes

PERFORMANCE CRITERIA / SERVICES PROVIDED

                                     FY-93        FY-94        FY-95        
 Criteria/Service:                  Actual       Actual      Budgeted     
 BUSINESS TAX
   Wholesale Beer licenses renewed         59           49           55           
   Wholesale Beer licenses issued           8            7            5            
   Retail Beer licenses renewed         3,962        5,921          986            
   Retail Beer licenses issued          3,938        4,558        4,000        
   Mixed Beverage licenses issued         152          159          160          
   Cigarette Retail licenses renewed    3,544        5,224          870           
   Cigarette Retail licenses issued     2,552        3,159        3,000        
   Tobacco licenses renewed                80            7            7            
   Tobacco licenses issued                  4            5            5           
   Wholesale Cigarette licenses renewed   276          259          260          
   Wholesale Cigarette licenses issued    123           84           80           
   Franchise license Accounts Paid     65,323       66,102       68,000      
   Sales Tax permits renewed           17,040       11,551       20,289       
   Sales Tax permits issued            21,494       14,269       16,000       
   Vending machine decal issued       110,776      106,413      110,000      
   Fireworks licenses issued            1,986        1,960        2,000        
   Fireworks permits issued                31           34           30           
   Use Tax permits issued                 472        1,000        1,000        
   Rural Electric Co-op licenses           35           40           40           
   Gross Production licenses issued     1,398        1,282        1,300        
   Telephone surcharge companies           41           41           41           
   Vehicle rental companies issued          7            7            7            
   Used equi/salv dealers licenses        261          147          150          
   Volunteer Fire exemptions issued       921          937          950          
   Admission Tax                          360          420          450          
   Manufacturers exempt certifications  1,567        1,058        1,200        
   Withholding registrations           11,161       12,382       12,000       
   Waste Tire registrations                85           72           70          
   Agricultural exemptions issued      65,569       78,000       78,000       
   Tourism Tax filers registered          857          982        1,000        
   Alcohol and Tobacco office audits    4,466        5,375        5,500        
   Alcohol and Tobacco field audits       197          218          200          
   Franchise audits                    10,338       33,083       25,000      
   Franchise field audits                 410          364          350         
   Motor fuel field audits                151          128          150          
   Gross Production office audits      12,760       13,519       14,000       
   Gross Production field audits          102           62           65          
   Sales Tax office audits             33,612       34,218       35,000       
   Veh rent/Doc stamps/Waste tire       2,424        2,545        2,500        
   Sales Tax field audits               1,391        1,388        1,400        
   Withholding Tax office audits        1,922        2,189        2,000        
   Withholding Tax field audits           522          494          500          
   Electric Co-op tax returns             420          480          480          
   Unclaimed property office audits        50           40           50          
   Unclaimed property field audits         24           21           21           

 MOTOR VEHICLE
   Registration mail out            3,320,362    3,080,222    3,100,000    
   Tag mail out                       129,625      123,419      124,500      
   Boat & motor titles issued          68,040       71,159       71,000       
   Boat & motor licenses renewed      305,199      311,382      315,000      
   Boat & motor dealer licenses issued     44           44           35           
   Boat & motor dealer licenses renewed   207          228          235          
   Motor licenses agents office audits  7,080        7,200        7,200       
   Motor license agent  field audits      290          300          300          
   Interstate truck companies audits      110           45          150          
   Motor fuel Importer licenses issued  2,461        1,973        1,475        
   Motor fuel Importer licenses renewed10,607        6,500        5,000        
   Motor fuel distributor license issued   29           46           55          
   Motor fuel distributor license canceled 31           61           45           
   Exemption permits issued            50,777       57,779       58,934      
   LPG permits issued                  11,155       10,350       10,750       
   Motor fuel field audits                243          240          240         
   Special fuel licenses issued             8            9           11           
   Special fuel licenses canceled          10           14           16           
 
 COLLECTIONS
   Taxpayer contacts                  344,308      322,251      344,313      
   Number of tax releases              19,639       16,381       19,639       
   Number of tax warrants filed        28,018       33,076       34,125       
   Number of pay plans established      6,513        8,547        6,513       
 
INCOME TAX
   Total Income Tax returns         1,273,009    1,498,962    1,750,000    
   Refunds processed                  677,580      854,745      900,000    
   Edit/audit                         294,845      295,000      250,000      
   IRS Revenue Agent Reports            1,551        8,329       10,000       
   Corporation audits                     603          673          750        
   Estimated tax principal & interest      78           20        1,500       
   Estimated tax reports              500,000      492,000      500,000     
   Oil royalty letters & assessments      914        1,259        2,000       
   Taxable cases closed                 4,500        4,390        4,000       
   Quiet title cases proc from legal    1,270        1,600        1,200        
   Estates audits completed             9,877        9,795        9,000       
   Specific Property Releases          40,000       26,320       40,000      
 
AD VALOREM
   Receipts From Income Tax        14,450,639   14,701,216   15,881,100   
   Reimbursmt Claims/Tax Exemption 13,234,068   13,670,708   14,000,000   
   Reimburst Claims/Dble Homestead  2,209,506    2,169,387    2,200,000    

EXPENDITURES BY FUND

                                     FY-93        FY-94        FY-95
 Type of Fund:                      Actual       Actual      Budgeted
 State Appropriated Funds
     General Revenue              $45,200,325  $41,865,559  $45,339,065
     Special Cash Fund
     Total Appropriated Fund Expe  45,200,325   41,865,559   45,339,065
 State Continuing/Revolving Funds:
     200 Oklahoma Tax Commission    8,253,371    9,294,254   10,868,450
     205 Mass Appraisal Fund                0    3,304,652    1,485,000
     215 OTC Reimbursement Fund     2,595,778    2,136,621    5,136,000
     230 Waste Tire Recycling Ind   1,673,265    1,977,574    1,841,400
     260 Unclaimed Property Fund      360,988      294,306      325,000
     265 Unclaimed Property Clear      28,143      121,664      150,000
     280 County Reimbursement Fun   2,209,506            0      647,543
     285 Ad Valorem Reimbursement  19,230,889   13,890,042   14,000,000
     Total Revolving Fund Expendi  34,351,940   31,019,112   34,453,393                                             
 Federal Funds:
 Total Expenditures by Fund       $79,552,265  $72,884,671  $79,792,458

EXPENDITURES BY OBJECT

                                     FY-93        FY-94        FY-95
 Object of Expenditure              Actual       Actual      Budgeted
 Salaries and Benefits            $40,194,421  $38,818,020  $41,613,012
 Professional Services              1,720,453    1,906,427    5,760,334
 Travel                             1,033,828    1,094,173    1,045,500
 Lease-Purchase Expenditures        1,335,702      198,443      167,603
 Equipment                            513,653      771,472    1,107,126
 Other Operating Expenses          11,640,548   11,711,094   11,549,328
     Operating ExpensesSub-total  $56,438,605  $54,499,629  $61,242,903
 Non-Operating Expenses:
   Reimbursement to Counties and   21,440,395   16,377,074   16,708,155
   Waste Tire Payments              1,673,265    2,007,968    1,841,400
 Total Expenditures by Object     $79,552,265  $72,884,671  $79,792,458

EXPENDITURES BY BUDGET ACTIVITY / SUB-ACTIVITY

                                     FY-93        FY-94        FY-95
 Activity No. and Name              Actual       Actual      Budgeted
 01 Headquarters                   $1,067,408   $1,056,982   $1,064,654
 03 Ad Valorem                     22,537,570   18,300,361   18,607,880
 04 Administration                    987,691    1,190,781    1,246,961
 05 Central Processing              5,020,587    4,930,673    5,133,162
 07 Collections                     4,554,483    4,417,662    8,842,195
 09 Income Tax                      4,637,064    4,333,382    4,501,659
 10 Business Tax                   13,936,889   13,661,135   14,429,783
 11 Legal Division                  2,651,631    2,229,592    2,367,222
 13 Motor Vehicle                  10,249,485   10,183,775   10,597,963
 18 Management Services             3,755,723    3,716,369    4,060,039
 88 MIS Data Processing            10,153,734    8,863,959    8,940,940
 Total Expenditures by Activity   $79,552,265  $72,884,671  $79,792,458

FULL-TIME-EQUIVALENT EMPLOYEES (FTE) and VEHICLES

                                     FY-93        FY-94        FY-95
 Activity No. and Name              Actual       Actual      Budgeted
 01 Headquarters                         15.6         15.0         15.0
 03 Ad Valorem                           26.2         34.2         38.0
 04 Administration                       20.0         25.1         26.0
 05 Central Processing                  122.3        110.0        116.0
 07 Collections                         138.1        134.0        143.0
 09 Income Tax                          114.5        104.6        112.0
 10 Business Tax                        307.1        289.0        313.0
 11 Legal Division                       59.6         47.6         53.0
 13 Motor Vehicle                       221.8        208.5        220.0
 18 Management Services                  68.3         64.6         67.0
 88 MIS Data Processing                 150.5        143.1        152.0

 Total FTE                            1,244.0      1,175.7      1,255.0
 Number of Vehicles                       5.0          5.0          5.0

HISTORICAL PERSPECTIVE / REVIEW
The Tax Commission retained Ad Valorem reimbursement fund carryover totaling $1,001,229 and the Ad Valorem division assumed an expanded role in it's operation on July 1, 1993 when the duties of the Ad Valorem Task Force were transferred from the Office of Auditor and Inspector to the Tax Commission. The commission absorbed AVTF personnel and the cost of operation through shifts in funding and assessments against the Ad Valorem Reimbursement Fund which have increased consistently for the last three fiscal years. The Ad Valorem Division collects receipts into the reimbursement fund to primarily provide "pass-through" funding to reimburse counties for the homestead exemptions and ad valorem reimbursement and to supplement county operations and school districts when there is a short-fall because of exemptions granted to certain classes of taxpayers. The fund also reimburses counties for the loss of revenues due to ad valorem tax exemptions granted to new or expanding manufacturing or research and development facilities.

The agency has implemented an automated revenue processing system to provide for faster processing of taxpayer reports and payments and more timely deposit of state revenues. The automated process performs the process of sorting, microfilming and entering data from individual tax return documents which reduces agency demand for personnel within this activity by approximately 30 to 40 FTE. Also the commission proposed legislation to require any person owing ten thousand dollars ($10,000) or more to remit through Electronic Fund Transfer (EFT). Legislation was intended to make tax receipts immediately available to the state and subsequently reduces the agency's demand for FTE within related operations, however, the proposal failed to pass the legislature and agency expects to file the proposal again during the 1995 legislative session. The commission has been successful in reducing staffing demands through utilization of technological advances since FY-91 and the effects are reflected in the FTE comparison with FY-92 which indicates agency totals have decreased.

Currently the Commission is implementing the requirements of legislation passed concerning the Charity Games Act and the Indian Cigarette Compacts. Efforts to improve taxpayer service continue to be implemented through new taxpayer education seminars and training of motor vehicle license agents, with increased emphasis being placed on compliance functions. Two (2) major programs were implemented during FY-95 they were the Income Tax Assessment System and a Business Receivable System. Both programs have served to enhance the operation of the commission through the use of improved technology.

The Tax Commission is currently planning to expand it's efforts to identify persons who are doing business within the state and are not complying with either state or federal tax reporting requirements. This "special enforcement" project will be coordinated through the agency's business tax division.