Revenue director sets sights on tax simplification

2013-12-01T10:00:00Z 2013-12-02T07:35:03Z Revenue director sets sights on tax simplificationBy CHARLES S.
JOHNSON Gazette State Bureau
The Billings Gazette
December 01, 2013 10:00 am  • 

HELENA — As he completes his first year as director of the state Revenue Department, Mike Kadas is looking ahead to some goals he has for the agency: tax simplification, transparency and more effective service.

“I strongly believe that having a tax system that is understandable by the taxpayer is critical to the support of that system by citizens,” Kadas said in an interview. “I’ll work to simplify the system that it’s more transparent and understandable, and I’ll also work to be out there and try to help explain it.”

Kadas also wants to improve efficiencies and try to have more tax filings done electronically. He hopes to work with local governments to do that with property taxes.

“We definitely want to do more with less, and so we’re constantly looking for more efficient ways to provide the services that we provide, and I think we have a pretty good record of that,” Kadas said.

Up to 85 percent of state income tax returns now are filed electronically. Taxpayers owed refunds get them in four or five days if they filed electronically versus three weeks if they mailed their returns.

Two major priorities for 2014 are the statewide reappraisal, or revaluing, of property and implementation of a 2013 law to reduce property taxes on business equipment.

“Preparing the whole reappraisal package for the next Legislature is a huge project,” Kadas said. “Then the Legislature will have an opportunity to essentially review it. If they want to change any of the rates for classes or do a phase-in, they can do it.”

Past residential reappraisals have been controversial, with values increasing by higher percentages in certain parts of the state than others.

Kadas said he’ll spend time traveling this spring and summer letting people know what will be coming with reappraisals.

The department is implementing Senate Bill 96, by Sen. Bruce Tutvedt, R-Kalispell, the most significant new tax law signed into law by Gov. Steve Bullock. It changes how business equipment is taxed.

“With that, we were essentially able to take two-thirds of the businesses — all small businesses — off of having to file their business equipment taxes anymore,” Kadas said.

Kadas, 57, brings diverse credentials as revenue director, including 14 years as a state legislator, 10 years as the elected mayor of Missoula and five years as an executive of a startup business, Rivertop Renewables.

These experiences reinforce to Kadas the importance of communicating well with the people he works with — from his boss, the governor, to department employees, taxpayers and legislators.

“I’m trying to make sure people know if they have something to say to us, that we’ll hear it,” he said. “We may not always agree, but we want to hear criticism and suggestions. We’re going to do our best job to be responsive to that.”

Kadas also has been willing to settle some long-standing tax protests with some corporations, which is a departure from recent practices at the department. The agency resolved property tax disputes with CHS Inc. over its refinery in Laurel and Puget Sound Energy over its share of the Colstrip power plants and transmission lines.

“I’ve always been, and I think I always will be, open to discussing things with anybody,” Kadas said. “I feel more comfortable operating that way. So we’ve had a couple of cases where taxpayers have come to us and wanted to discuss settling and we’ve had a couple of cases where we’ve gone to taxpayers said, ‘Do you want to talk about this?’ I think we’ll continue to do this.

“But obviously every discussion isn’t successful. We’ve had other conversations that were not as fruitful.”

Department officials must evaluate the state’s economic exposure and the chances of winning and getting a good precedent versus a bad one if it loses, he said. But Kadas said the department will stand its ground on cases that are “absolutely cut and dried.”

“I think unfortunately there are some businesses who essentially make it part of their corporate strategy to push the boundaries as far as they possibly can,” he said. “I think we just cannot give into that.”

Gov. Bullock, who appointed Kadas, said he has “known and admired him for a long time.”

“The experience he brings to the table, both in state and local government as well as his relationships and understanding of the private sector, makes him an invaluable member of my team,” Bullock said. “He is incredibly bright and is both visionary and pragmatic at the same time. Mike has earned not only my respect, but the respect of his colleagues throughout his career.”

Kadas also drew praise from Tutvedt, a key Republican who chairs the Senate Taxation Committee.

“I think Mike’s doing a good job,” Tutvedt said. “I worked well with Mike at the session. Mike has just has a more inclusive way and appears to be trying to finding a fair resolution to the taxes owed (by some companies).”

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