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The state tax function and emerging technologies

Now is the time

Information technology is changing business. In this article, Deloitte Tax LLP’s Andrew Gold and Steve Ceglarek discuss three disruptive technologies and how state tax executives can derive significant benefits from them.


​Information technology (IT) has brought many changes to finance, accounting, and tax operations in the decades since enterprise resource planning systems first appeared. For the most part, IT-driven innovation and transformation have found their champions and have driven value into the finance and accounting functions. Now is the time for tax and more specifically, the state tax function to capitalize on potentially game-changing technology.

Recognizing the integral and growing role taxes play in strategic business and financial decisions, many corporate and finance leaders are seeking tax departments’ involvement in executing the enterprise agenda and utilizing technology’s potential benefits. Tax executives generally, and those responsible for state taxes specifically, are being encouraged to become more strategic, do more with less, and bring more tax insights to their business stakeholders from ever-growing volumes of corporate data.

It is a favorable time for state tax executives to investigate and act on these imperatives. Current emerging technologies have the potential to improve operating efficiency and uncover new insights that can drive factbased decision-making and change the value tax brings to the company’s bottom line. Three disruptive technologies in particular are worth a look: robotic process automation (RPA), cognitive computing, and big data platforms.

State tax executives can benefit significantly from learning about the capabilities of these technologies and developing compelling use cases for where and how the tools can mitigate risk in reporting, provide more accurate tax calculations, and reduce or stabilize costs throughout the compliance, provision, and planning processes. Now is the time for the state tax function to not only take part in broader strategic discussions about emerging technology, but instead be ready with rich use cases for prototyping and demonstrating the value these new capabilities can bring.

Disruptive technologies

RPA—Engine of efficiency

RPA is the use of software routines or agents to automate discrete, repeatable, high-volume processes. It can be used to automate work performed within a single application or across multiple applications. Leading companies are applying software robotics across entire sets of end-to-end processes or sub-processes, and automating repeatable, complex steps from data capture to reporting.

Cognitive technologies—Diverse applications

Cognitive systems capable of communicating, learning, and decision-making can extend the power of information technology for tasks traditionally performed by humans. Today, when on-demand streaming video services recommend a purchase, cognitive technology is doing the work. Cognitive tools can be applied to operations that involve routine tasks and the ability to teach a computer a body of knowledge.

Big data tools—The ability to dig deep

Tax organizations are challenged to gather, maintain, and archive data for many uses. In state income apportionment, for example, the state tax function often extracts data from multiple source systems to assemble transaction-level detail, analyze it, and determine where transactions occur or customers are located.

Big data tools can help meet these demands by automatically accessing, combining, processing, and analyzing large volumes of disparate data, both structured and unstructured. They can also give state tax functions more granular details than previously possible, as well as speeding and improving scenario planning.

To learn more, read full report, The state tax function and emerging technologies: Now is the time.

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If you have questions regarding this article, please contact:

Steve Ceglarek, principal, Deloitte Tax LLP

Andy Gold, partner, Deloitte Tax LLP

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