Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Tax Administration Refunds topic
No spam. Unsubscribe anytime.
Revenue commissioner reports $1.3 billion refunded under franchise‑tax law change; remaining refund pool and FY26 requests explained
Summary
Department of Revenue Commissioner David Gergano told the Senate committee the department has refunded just under $1.3 billion of an estimated $1.55 billion franchise‑tax change, described remaining buckets of funds, and outlined FY26 cost and contract increases the department requests to support operations.
Department of Revenue officials told the Senate Finance, Ways and Means Committee on Feb. 18 that they have refunded just under $1.3 billion under last year’s franchise‑tax change and described the remaining money the department is holding as it completes claims processing. Commissioner David Gergano also summarized the department’s FY26 cost requests, including maintenance for core tax systems and higher license‑plate production costs.
Gergano said the original estimated refund universe was about $1.55 billion and about 120,000 taxpayers were identified as potentially eligible. “As of today, we've refunded just under $1,300,000,000,” he told the committee, and then described three buckets for the remainder: (1) roughly $11 million reserved for businesses in the Hurricane Helene disaster area that received an extension to file claims; (2) about $150 million of pending claims the department is still processing, of which the commissioner said roughly $75 million would be credited back to the General Fund (because the timing and payments for tax year 2023 interact with the refund process); and (3) $113 million the department has notified can be released to the General Fund.
Commissioner Gergano emphasized accuracy and customer service in administering the refunds: the department mailed notices to potentially eligible taxpayers, created a detailed web page and Q&A materials, and kept phone lines broadly available to assist filers.
On FY26 requests, the department asked the committee to approve an $18.7 million total increase in spending authority: about $10 million in general‑fund requests and $8.6 million from dedicated or current revenues. Key items included a renewed maintenance contract for the TR3 tax system (vendor Fast Enterprises) and a $3 million recurring increase to cover higher license‑plate production costs from the department’s vendor (Tricore), citing higher raw‑material and shipping costs and growth in vehicle registrations. The department also requested authority to recognize and spend certain fees collected for motor‑vehicle transactions and to accept and spend new hemp‑derived cannabinoid (Delta‑8) tax administration revenues that the legislature designated for enforcement and administration.
Gergano told members the TR3 maintenance contract is a sole‑source renewal because Fast Enterprises owns the system in use and the department is negotiating a new maintenance agreement that will come before fiscal review. The department said most of the FY26 requests are recurring; the Delta‑8 administration item includes recurring and nonrecurring components.
Committee members asked follow‑up questions about the residency of refunded corporations, the department’s estimate that many affected entities had out‑of‑state addresses, and about the timing and classification of funds that must be credited to the General Fund. The department said it will continue working through pending claims and provide more detailed analyses on the questions legislators asked.
The committee approved the department’s budget request by roll call.
