Mission:

The Department of Revenue’s mission is to gain compliance with tax laws to fund public services in Minnesota.

Statewide Outcome(s):

Revenue supports the following statewide outcome(s).

Efficient and accountable government services.

Context:

The Minnesota Department of Revenue works together with individuals (3.7 million), businesses (610,000), local governments (over 3,300), federal and state agencies, tax professionals, and others to administer 28 state taxes, collecting $17.3 billion annually to fund state and local programs.

The Department also collects non-tax debt owed to state agencies, oversees the uniform application of property tax laws by local governments, administers state property tax refund and relief programs, and makes state aid payments to counties, cities, towns, and special taxing districts through 32 different state programs.

Revenue collected by the Department is allocated through the budget process to fund education, health care, roads and bridges, transit, parks and trails, prisons, public safety, job training, economic development, local government services, and other programs.

Complex tax laws, changing technology, taxpayer expectations, and shifting demographics all influence the Department’s efforts to administer the tax system. Key issues for the Department include formulating recommendations for changes to tax laws that meet expectations for fairness, simplicity, and economic growth; improving outreach and education efforts that promote and increase voluntary compliance; and expanding the use of tax analytics to increase the efficiency of enforced compliance. A fully implemented integrated tax system and new website lay the groundwork for further improvements to customer interfaces, process improvements to taxpayer services, and reduced cost of compliance for taxpayers and the state.

To carry out the work of the Department, the budget is organized into two major programs, Tax System Management and Debt Collection Management. Tax System Management includes activities such as compliance support; appeals, legal services and tax research; property tax administration and state aids; tax payment and return processing; tax compliance and enforcement; and technology development. The Debt Collection Management program includes tax and non-tax debt collections.

The Department employs over 1,500 full-time equivalent staff organized into five major clusters: business taxes, individual taxes, tax policy, and administrative support functions, and MN.IT employees provide technical support.

More information on the Department, including its mission, values and strategies, can be found at: http://www.revenue.state.mn.us.

Major Taxes: In fiscal year 2012, most state tax revenue was generated by the Individual Income Tax ($7.8 billion), Sales and Use Tax ($4.3 billion) and the locally administered property taxes ($7 billion, not included in state total revenues).

Other State Taxes include: corporate franchise tax; estate tax; motor vehicle sales tax; motor fuels excise taxes; alcoholic beverage taxes; cigarette taxes and fees; tobacco products taxes and fees; controlled substances tax; mortgage registry tax; deed transfer tax; bingo, raffle and paddlewheel tax, pull-tab and tip-board tax; combined receipts tax; pari-mutuel taxes; insurance premium taxes; health care surcharges; MinnesotaCare taxes; mining occupation tax; net proceeds tax; state property taxes; motor vehicle registration tax; air flight property tax; aircraft registration tax; rural electric co-ops; solid waste management taxes; and metropolitan landfill fees.

Strategies:

The Department has identified seven strategies to achieve our vision - "Everyone voluntarily reports and pays the right amount of tax: no more, no less."

1.      Provide taxpayers with the information, education and services they need to voluntarily comply.

2.      Create operational efficiencies and design systems that align with changes in technology, secure taxpayer information, and meet taxpayer and employee needs and expectations.

3.      Continuously improve our ability to identify non-compliant taxpayers and assist them with returning to compliance.

4.      Listen to our customers and incorporate feedback into the way we provide information and deliver services.

5.      Identify, develop and recommend changes to the tax laws that help make the tax system fair, simple, reliable, and competitive.

6.      Foster a productive, innovative and healthy work environment for all employees.

7.      Measure the cost and effectiveness of our activities, add value, and make improvements to achieve positive outcomes.

Measuring Success:

The Department is committed to using performance measures to drive desired outcomes, measure progress and ensure productivity goals are met. Eleven outcome measures capture the progress the agency is making toward meeting its mission and vision. These key measures will be used to track, evaluate and communicate the Department’s progress.

1.      Percent of taxpayers that file and pay on-time

2.      Taxpayer satisfaction

3.      Percent of electronic taxpayer transactions

4.      Taxpayer security

5.      Non-compliant taxpayers brought into compliance

6.      Sustained compliance rate

7.      DOR employee turnover rate

8.      Employee satisfaction

9.      Return on investment (ROI) compliance vs. voluntary

10.   Participation in DOR outreach activities

11.   Appeals cases settled and age of unresolved cases