Pou & Cryan Want to Prohibit Tax Preparers from Charging Extra for Electronic Filings

TRENTON – A Senate committee today endorsed legislation authored by Senator Nellie Pou and Senator Joe Cryan that would prohibit tax preparation software companies from charging extra fees for the electronic filing of state tax returns.

While the state does not collect fees to E-file tax returns, many tax preparation companies do charge consumers a fee for filing their returns, imposing costs of up to $25 for the electronic filings.

“This extra fee is gratuitous and unfair to consumers,” said Senator Pou (D-Passaic). “They shouldn’t be forced to pay more because they are making use of electronic technology to file their returns.”

“Taxpayers shouldn’t be hit with so-called ‘filing fees’ when the electronic service is free to the tax preparation companies,” said Senator Cryan (D-Union). “These fees can be avoided by mailing the state tax return, but E-filing is safer, faster, and generally more convenient than paper filing, and often results in refunds reaching consumers sooner.”

The bill, S-850, approved by the Senate Commerce Committee, would define “electronic filing” as filing a tax document by the use of computer technology, including transmission through the internet. And, the bill would define “tax preparation software company” as a developer or vendor of any computer software program intended for tax return preparation purposes, including an off-the-shelf software program loaded onto a taxpayer’s computer or an online tax preparation application.

Under the bill, a violation would be punishable by a monetary penalty of not more than $10,000 for a first offense and not more than $20,000 for subsequent offenses. In addition, a violation can result in cease and desist orders issued by the Attorney General, the assessment of punitive damages, and the awarding of damages and costs.