Doing your taxes has, in many ways, never been easier. So easy, in fact, that nearly 90 percent of taxpayers in Massachusetts filed their state tax returns online this year, saving the state millions of dollars. That’s largely because of the proliferation of tax prep software, from companies such as Intuit and H&R Block, which walk filers through the process. Now Governor Patrick has proposed legislation that would ban the fee firms charge for their help. Legislators should reject this proposal.
Tax software companies usually don’t charge customers an additional fee to file federal returns electronically but do for state returns. That’s how they make money. Patrick argues those fees — typically $19.99 — cause some state taxpayers to stick with paper returns. That’s problematic because e-filing saves the state significant processing costs and also speeds refunds. According to the state Department of Revenue, about 70 percent of paper filers used software or the Internet to calculate their tax bill but then printed and mailed their returns.
Trying to cut costs is admirable, but Patrick is overstepping by asking to ban fees. The move is not, as the governor suggests, a “consumer protection measure.” Taxpayers already have the option of filing electronically for free on the state’s website if they can’t afford the fees charged by tax preparation firms. The governor should leave it to consumers to decide whether or not to pay for e-filing.