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Case Study

State of California Franchise Tax Board generates $3.7B

  • Processed 24,000 tax returns in an hour
  • Processed up to 960,000 tax returns per day at peak time
  • Reduced average cost to close a tax year

“Our tax modernization resulted in efficiencies, many new citizen service options, and additional revenue in just phase one of the project. The Pega case management solution played an important role in our modernization success.”

The Business Issue

The State of California (CA) Franchise Tax Board (FTB) is the second largest tax agency in the U.S. and the fifth largest economy in the world, processing more than 16 million personal income tax returns and one million business tax returns annually.

With personal income tax supplying the majority of the state’s revenue for citizen services, CA FTB needed to close a tax gap between what citizens owed and what they voluntarily paid in their returns. The key to achieving this goal was the ability to quickly validate statewide tax returns against the complex and changing tax code.

The Solution

To improve the customer experience and reduce costs, CA FTB initiated the Enterprise Data to Revenue (EDR) project. The Pega Government Platform™ was selected to be part of EDR, first to automate paper correspondence processing and then as the platform used to process personal income tax returns, handling as many as 960,000 returns per day. Additionally, EDR provides secure self-service options for taxpayers, validates returns, and automates and standardizes manual processes.

The Results

  • Through improved processes and automation, EDR generated more than $3.7 billion in additional state revenue between 2011-2016 and an additional $1 billion annually.
  • Automates the processing of approximately one million digital and paper-based tax returns, reducing processing costs and improving employee productivity.
  • Taxpayers choose from correspondence delivery option for faster responses to questions and quicker tax refunds.
  • Delivers greater transparency and control, allowing taxpayers to view their filed returns, payments and withholding, correspondence, and accounting details all in one place.

All text sourced directly from Governments Building for Change.

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Related Resources

Download the full State of California Franchise Tax Board case study (and many others) here.

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Industry: Government Product Area: Platform Solution Area: Customer Service Solution Area: Enterprise Modernization
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