DOR seeks expanded tax-compliance checks for licenses and state contracts; witnesses warn of costs and unintended harms

Senate Committee on Finance and Revenue held a public hearing on Jan. 27, 2025, for Senate Bill 800, which would expand tax-compliance requirements tied to state licenses and certain state contracts and permit the Department of Revenue to require and verify tax compliance certificates from license applicants and contractors.

Deanna Mack, administrator of the DOR collections division, told the committee the proposal is grounded in prior pilot projects and more recent examples of noncompliance among some licensees. Mack described a trigger-based approach: if a licensing group's overall compliance rate falls below the statewide average (the bill contains a 95% threshold), the group would be required to demonstrate tax compliance for at least five consecutive years by obtaining a tax compliance certificate from DOR and attaching it to licensing or contracting applications. "So the requirement is there for all licensees unless they're an employee of someone else, but if a group of licensees overall compliance rate drops below the average for everyone else then that group will be required to demonstrate tax compliance for at least 5 consecutive years by obtaining a tax compliance certificate from our agency," Mack said.

Mack said DOR would require licensing agencies to send lists…