State signs $50 mil
pact to improve
tax collections

The contractor says it can bring in
an additional $157 mil for the state

Star-Bulletin staff

The state Department of Taxation has signed a $50 million contract with a major consulting firm to improve tax collections in Hawaii with the help of computers.

Fairfax, Va.-based American Management Systems Inc. announced the five-year contract today, saying a comprehensive restructuring of the department's operations will generate $157 million in additional collections.

"The real results of this project will be improved state taxpayer services and reduced expenses for years to come," said state tax director Ray Kamikawa.

American Management, a $1.06 billion company working with government agencies in 30 states, is among the largest consulting firms worldwide.

The planned restructuring will use sophisticated computer technology to identify people and businesses not filing or under-reporting their taxes. The effort also will allow electronic filing of taxes of all kinds.

Under the performance-based contract, American Management is not to be paid until key results are achieved and collections are enhanced, the company said. The contract is to be paid out of the increased revenues with no net drain on taxpayers.

The state tax department collects about $3 billion annually.