Episode Transcript
[00:00:06] Speaker A: Welcome to taxing poetic. I'm your co host, Tim Howe, along.
[00:00:09] Speaker B: With Jenny Carter, your other host.
[00:00:11] Speaker A: Awesome. And we, as always, have with us JB.
[00:00:14] Speaker C: What's up?
[00:00:15] Speaker A: How you doing, man?
[00:00:16] Speaker C: Good.
[00:00:16] Speaker A: Awesome. Right on. And today we have got a special guest with us, Frank O'Connell, who is the state commissioner of revenue for the state of Georgia. Frank, it's great to have you here.
[00:00:25] Speaker D: Thank you very much, Tim. I appreciate it.
[00:00:27] Speaker A: Absolutely, sir. And, Jenny, as always, are you gonna start us off with a little bit of poetry?
[00:00:31] Speaker B: Of course. I have a haiku just for you, Frank. Mister commissioner, is everyone ready?
[00:00:36] Speaker A: Oh, yeah.
[00:00:38] Speaker B: Sinatra, Lloyd Wright. Neither of these famous franks could handle sales tax.
[00:00:47] Speaker D: Beautiful.
[00:00:49] Speaker B: Thank you. I appreciate that.
[00:00:51] Speaker A: In all honesty, I seriously think that's one of your best. And that's not just cause Frank's sitting here. That was actually really. I was like, where is she going with this? Good job, Jenny.
[00:00:59] Speaker B: You are better than both of them in my book.
[00:01:01] Speaker D: I'd like a copy of that to take.
[00:01:03] Speaker B: You're welcome. I'll cross stitch it for you on a pillow.
[00:01:06] Speaker C: I love that.
[00:01:07] Speaker A: Perfect. All right, so today we're going to be doing a new segment. It seems like we're always getting a new segment on here, but it's fantastic. And it's going to be Donna's grab bag. So thanks to our director of legislation and tax controversy, Donna McMurray, for coming up with a large group of questions for our state commissioner of revenue. Frank O'Connell has had a storied career. Just to give you a little background on him, he started off as a consultant, worked in big four accounting, and he's an attorney, and became the director of tax policy at the Georgia Department of Revenue and worked his way up to now. He is the commissioner of revenue, aka the top dog, and we're glad to have him. And thank you for your public service every single day.
[00:01:47] Speaker B: Sir, is there anything you want to say about yourself personally, like where you went to college? Because we have some opinions about that around here. Not me personally, just maybe some other people.
[00:01:59] Speaker D: Well, law school was in Notre Dame.
[00:02:01] Speaker B: Okay. That's the one we were. Yeah, yeah, yeah. That's okay. Okay.
[00:02:04] Speaker D: And undergrad from University of West Florida in Pensacola.
[00:02:09] Speaker B: Oh, wonderful. Are you from Florida?
[00:02:11] Speaker D: Originally from a Navy family, and my dad was stationed in Pensacola back in the seventies.
[00:02:18] Speaker B: Really? Oh, that's wonderful. Navy. Tim was also in the Navy.
[00:02:21] Speaker A: I'm a former Navy guy. Yeah. Did four and a half years.
[00:02:23] Speaker D: Well, thank you for your service.
[00:02:25] Speaker A: You're very welcome, sir. My pleasure.
[00:02:26] Speaker C: My stepdad got kicked out of the Navy.
[00:02:28] Speaker B: Oh, wow.
[00:02:28] Speaker A: Hey, that's a story for another day, and I can't wait to hear that, too. In all honesty, as a sailor, it's gonna take an awful lot to get kicked out of the service.
[00:02:35] Speaker C: Yeah, it was a lot.
So, yeah, our new segment called Donna's grab bag. There's a lot of questions in here, and we're just gonna have Frank pull a question out of the grab bag, read it, and if he wants to answer it, he'll answer it. And if not, he'll just go to the next question.
[00:02:50] Speaker A: And the cool thing about this segment is that there's tax and non related. Tax or just non tax related?
[00:02:55] Speaker C: Excuse me?
[00:02:56] Speaker A: Questions. I got bored and wrote a couple.
[00:02:57] Speaker C: Questions in here, so.
[00:02:58] Speaker A: Oh, great.
[00:02:59] Speaker B: We all had a lot of questions we wanted to ask you, so we've decided just to throw them all in a box and that way it would be fair.
[00:03:04] Speaker C: I'm handing in the box now.
[00:03:05] Speaker B: Okay. And if you don't like it, just throw it on the floor.
[00:03:07] Speaker C: But you have to read it.
[00:03:08] Speaker B: Okay.
[00:03:11] Speaker D: What is your favorite in state tourist attraction.
[00:03:15] Speaker A: That's a good one.
[00:03:17] Speaker B: Yeah. Good start.
[00:03:19] Speaker D: I guess I'd have to say amakolola Falls.
And the reason is it's the first place that we took my young daughter when she was probably about six months old.
[00:03:30] Speaker C: Oh, dang.
[00:03:31] Speaker D: Yeah. You know, you've got a small kid, you want to be careful with them. But we bundled her up and took her to Ama Kolola. It was a beautiful day.
[00:03:40] Speaker A: That is awesome.
[00:03:41] Speaker B: It is beautiful. I took my kids there, too, when they were small. And, yeah, it was cold that day.
[00:03:45] Speaker D: Is it a lot of hiking?
[00:03:47] Speaker B: It's some hiking. I'm not a big hiker. And I did okay.
[00:03:50] Speaker C: Six months old is impressive. Any amount of hiking. Walking 100ft with a six month old is like, how.
[00:03:56] Speaker D: Yeah, I could do that 30 years ago.
[00:04:00] Speaker A: I love it.
[00:04:01] Speaker B: I love it.
[00:04:01] Speaker C: All right, what else we got in that grab bag?
[00:04:03] Speaker D: All right, let's see.
When you were a little boy, did you dream of being a state commissioner of revenue?
[00:04:13] Speaker C: Yeah, I wrote that one.
[00:04:16] Speaker A: Good job, JB.
[00:04:19] Speaker D: The answer is no.
[00:04:21] Speaker B: What are you talking about? We all dreamed of being sales tax professionals.
[00:04:25] Speaker A: I was gonna say, frank, if that was really gonna be the answer of yes, you and I need to have a conversation.
[00:04:33] Speaker D: It just shows you you can't predict the future. You don't know where you're going to end up. And as recently as ten years ago, somebody said, well, you might make a good commissioner. Now I've been at the department at that time for 1012 years, and I said no because it's a difficult job, and it was one I didn't think I was prepared for ten more years. Okay, now I'm prepared.
[00:04:58] Speaker A: What's your favorite part about your job?
[00:05:00] Speaker D: I guess part of it is prior times in my career, I've been a technical person.
Now people are looking to me for inspiration. Well, that's exciting. That is something completely different than, you know, a technical income tax question, a sales tax planning memo, and it's not something I foresaw, but I love it.
[00:05:25] Speaker C: What do you mean by inspiration?
[00:05:27] Speaker D: Well, you're a leader, of course, and people want to know that you care.
You ask them about what they're doing.
You see someone who works for us, and they step in the elevator. I want to talk to them because I want to let them know that I care. And I come from a shy background, so it's been good being stretched like this, too.
[00:05:54] Speaker B: Do you have any job openings?
[00:05:57] Speaker A: Wow.
[00:05:57] Speaker D: What a great place to work.
[00:06:02] Speaker B: Like a wonderful leader. That's great to hear.
[00:06:04] Speaker D: Thank you. But we can talk after the show.
[00:06:06] Speaker A: Oh, gosh, I love this. Oh, my goodness.
[00:06:10] Speaker C: What else we got in the grab bag?
[00:06:12] Speaker D: Two for two for two.
Are you billing us for this?
[00:06:19] Speaker A: I mean, he is an attorney, right? I guess that's an appropriate question. Oh, wait. But wait a minute.
[00:06:23] Speaker D: But I mean, good question, because, of course, that's something I had to do before going to the department was keep track.
[00:06:30] Speaker B: Sure.
[00:06:31] Speaker D: Every 15 minutes, one time every six minutes. But, yeah, six. Well, that was at a law firm early.
[00:06:39] Speaker A: Wow. You guys literally build in six minute increments.
[00:06:43] Speaker D: Yes.
[00:06:43] Speaker A: Oh, my gosh. How long did you last there?
[00:06:46] Speaker D: Well, that's why I'm in.
[00:06:50] Speaker A: So he's in public service. That's great. Good job.
[00:06:54] Speaker D: Was there a noticeable uptick in sales tax registrations resulting from Wayfair and the economic nexus law that went into effect?
And, of course, the answer is yes. And that's something that the General assembly and the governor's office and outside organizations wondered and asked us. How much revenue has that driven? And so we've tried to keep track of who registered from Wayfair and what sales tax revenues came in from that.
The Georgia State University Fiscal Research center made a prediction, and, of course, by circumstances, it far surpassed the prediction because it was also the pandemic starting up.
And so with the Wayfarer and the economic nexus law and the marketplace registration that really resulted in a dramatic increase.
[00:07:51] Speaker A: Do you think the department is adequately handling the volume of registrations that are actually coming in?
[00:07:57] Speaker D: Well, as you may know, part of the answer is we're in streamline, and so they have a registration system. And so a number of the registrations came in through them into our system, but we've been able to handle it really with no problem.
[00:08:14] Speaker A: That's great.
[00:08:15] Speaker D: And again, as we all know, I just want to say this in a way, fair economic nexus. This is a sales tax that was due at some point. It's nothing new, right?
[00:08:25] Speaker A: Absolutely. Whether it was going to be a born on the consumer or whoever. Right.
[00:08:29] Speaker C: We did a whole episode just on Wayfair, and that was basically, we just want to let everybody know, this is, you already owed this. It was just right now you have to pay it.
[00:08:38] Speaker A: That's exactly right.
[00:08:39] Speaker B: Now you legally are.
[00:08:40] Speaker A: That's right.
[00:08:42] Speaker D: College football or pro football.
[00:08:46] Speaker A: Yes. Good question.
[00:08:48] Speaker D: Or both.
[00:08:49] Speaker A: Or both.
[00:08:49] Speaker B: Or both.
[00:08:50] Speaker C: Both is good.
[00:08:52] Speaker D: I've been an Atlanta Falcons fan for a long time.
[00:08:56] Speaker A: I'm sorry.
I truly apologize.
[00:08:58] Speaker D: Oh, it's about to take another upturn, so.
[00:09:00] Speaker C: Yeah, it really could.
[00:09:02] Speaker A: It really could be.
[00:09:03] Speaker D: Could be.
[00:09:03] Speaker C: Okay.
[00:09:04] Speaker D: Yeah. College football, Notre Dame, growing up in an irish catholic family, and when I first went there, believe it or not, it was the Rudy year.
[00:09:15] Speaker B: Oh, that's great.
[00:09:16] Speaker A: No kidding.
[00:09:17] Speaker D: So I was in the statement, the stadium, as a freshman when Rudy made his one tackle and one appearance.
[00:09:23] Speaker B: Oh, my goodness. That makes me want to cry. Yeah, that's cool.
[00:09:26] Speaker D: But none of us freshmen knew who the heck Rudy was.
[00:09:29] Speaker A: Oh, sure.
[00:09:30] Speaker B: You're just some guy, right?
[00:09:31] Speaker D: Yeah. You know, the freshmen are over in one area, and the people, the seniors, juniors, that knew what were. What was going on were in different sections.
[00:09:40] Speaker A: They were playing Georgia tech, too, right?
[00:09:42] Speaker D: Yes.
[00:09:42] Speaker A: That's what's so amazing. Yeah. They're actually playing Georgia Tech. Oh, wow. Yup.
[00:09:47] Speaker C: Very surprised.
[00:09:48] Speaker D: Absolutely.
[00:09:48] Speaker B: Maybe. Maybe you'll get a tax related question in here somewhere.
[00:09:53] Speaker A: That's great. Well, I'm a huge. In all honesty, I'm a huge Seattle Seahawks fan, so I'm a big pro football guy.
[00:09:59] Speaker D: Do you know I was in the Seahawks Stadium, the prior stadium, the first football game that was ever played there at the kingdome? Yes. No way.
[00:10:09] Speaker A: Oh, my gosh. That is amazing.
[00:10:11] Speaker D: 1976, and that same summer, I saw the Eagles in the kingdome, and the warm up was Linda Ronstadt.
[00:10:21] Speaker A: Oh, my God.
[00:10:23] Speaker D: That is great. What a treat.
[00:10:26] Speaker B: That is a treat.
[00:10:27] Speaker A: What's your favorite barbecue restaurant in the city of Atlanta?
[00:10:29] Speaker D: Oh, that's. That's not fair.
[00:10:31] Speaker B: Is that not fair?
[00:10:32] Speaker D: I'm not gonna pick favorites.
[00:10:34] Speaker B: Don't put them on the spot.
[00:10:35] Speaker D: Tim, I am everybody's state revenue commissioner.
That's great. And I wanna stay loved.
[00:10:44] Speaker C: There you go.
[00:10:45] Speaker A: Okay.
[00:10:46] Speaker D: What is your. Who is your favorite taxing, poetic host?
And why is it Jenny, who wrote that?
[00:10:56] Speaker B: Yeah, who wrote that question?
[00:10:58] Speaker A: Are you serious? And I have to be like six shades of red right now, too. I'm sure. Great. Congratulations, Jenny. Good job. Way to throw that soft fall up in there.
[00:11:07] Speaker B: Well, you didn't say why.
[00:11:09] Speaker C: Remember, he's trying to stay loved.
[00:11:11] Speaker B: I know.
[00:11:11] Speaker C: By everybody.
[00:11:12] Speaker A: He's everybody's revenue commissioner. Everybody's revenue commissioner.
[00:11:15] Speaker B: I'm teasing. I'm teasing.
[00:11:18] Speaker D: Do you think Georgia will remove the transaction count threshold for economic nexus as other states have done?
I think it could happen.
It's 200 transactions.
Is that right? 200?
[00:11:33] Speaker A: Yes, sir.
[00:11:34] Speaker D: That's what I thought.
[00:11:34] Speaker A: Yes, sir.
[00:11:36] Speaker D: You know, it doesn't come into play as much as the other part.
And, you know, it's a legislative question.
[00:11:47] Speaker A: Yeah.
[00:11:48] Speaker D: And it gives me the opportunity to say, we don't make policy, we implement policy.
And so the question is basically, do I think the legislature will do it?
I'm not sure.
[00:12:00] Speaker A: Got it. Got it. Do you miss getting your hands dirty and doing research? And sometimes, you know, I do at.
[00:12:08] Speaker D: The same time, you know, and if you're talking what we do with the department, I think you are. At the end of the day, my policy group is going to bring something to me.
[00:12:20] Speaker A: Right.
[00:12:20] Speaker D: It's one of the advantages of having a background in it so I can challenge them, and I do.
[00:12:25] Speaker A: Got it.
[00:12:26] Speaker D: And sometimes the answer ends up being different than what they're recommending, but that's how you come to good answers, is always through collaboration.
[00:12:33] Speaker A: I love that. Awesome.
[00:12:36] Speaker D: See if I can get all of these done.
[00:12:38] Speaker C: That'd be amazing.
[00:12:38] Speaker B: That would be.
[00:12:39] Speaker D: Over the last few years, the department has seen a fair number of retirements.
How has turnover affected staffing levels, especially in audit?
You know, I'll say that.
I know that we had a couple hundred more people when I first started, but we're able to do the same job and probably more efficiently with fewer.
You know, at one point, we had a lot of people that were devoted to fixing the paper sales tax returns. Well, that's a very labor intensive thing.
[00:13:13] Speaker A: Yes, sir.
[00:13:13] Speaker D: But now they're all filed electronically, so we don't do that at all.
[00:13:16] Speaker A: Got it.
[00:13:16] Speaker D: Now, as far as audits go, we have much better systems for audit selection.
And so, frankly, whereas before we tried to get, or we measured a six to one, eight to one return on auditors. These days, it's more like 14 to one because it's easier to audit the people that should be audited.
[00:13:38] Speaker A: Got it.
[00:13:40] Speaker D: So we have had, you know, we have less people. Now, you mentioned in the question the retirements, always difficult, particularly when you see experience go out the door. But we're doing a couple things to address that.
One is we're cataloging all of our processes and making sure that we've got them in a central location.
Probably 350 things we do on a repeatable basis. So if somebody steps in, they ought to be able to go to our intranet site. And if they've been asked to do a certain job, they'll be able to see what that job entails.
[00:14:16] Speaker A: You know, I had a partner tell me once, and this is when I was in junior staff at KPMG, and he said, everybody thinks that they're irreplaceable, but you need to look at your employment roster and your group of people as a five gallon bucket of water. And no matter how big or how small the rock is, they'll always be ripples. But it's ultimately always going to go back to being smooth. Right at the end of the day, when all the ripples settle out, it's still the same five gallon bucket and it's all smooth. That's kind of how you got to trade it. I always thought that was pretty good advice.
[00:14:47] Speaker B: Yeah. And technology, of course, creates efficiencies for all of us. Like you were saying, with everything being filed online and then auditors maybe communicating with taxpayers online or through Zoom or teams, hopefully that helps you don't to go on site as much, maybe.
[00:15:03] Speaker D: Absolutely.
And we've gotten a couple of other ideas. One is we've got a team that when a business files for a new sales tax or withholding tax number, they register with us.
That creates a return expectation in the system. And if a couple months go by and we can get a list of folks that haven't filed, this group reaches out.
[00:15:29] Speaker B: Oh, we know. We hear from them.
[00:15:31] Speaker D: Oh, you do? Oh, that's great.
[00:15:32] Speaker A: Yeah. You know, and I'll tell you, it's nice to reside and live in a state where you're proud of what the department does. And it's not just cause you're sitting here. I mean, we have a bad list of states that we pick on historically, and it's kind of a. It's what we call our apologies list. Right. JV.
[00:15:49] Speaker C: Yeah, we have to do a list of apologies at the end of every episode for who we've offended.
[00:15:53] Speaker A: Yeah. And we typically offend. Colorado is always, Colorado is always number one. And I have family who lives there, and I legitimately, I pick on Colorado all the time just because. I mean, and look, folks in the DOR department of taxation, wherever you're at, I mean, you have a thankless job. I mean, seriously, a lot of times people just criticize and they're like, oh, my gosh, why do we get all these notices and stuff like that? And it's nice to live in a state where you're like, you know what? These guys are doing their job.
[00:16:16] Speaker C: Top 25.
[00:16:17] Speaker D: That's a good segue to the next question. What is your Social Security number?
You go first, Tim.
[00:16:27] Speaker A: That has to be a JV.
[00:16:29] Speaker C: It is a JV question. But I do want to, like, just like, even if I had your Social Security number, I wouldn't know what to do with it.
[00:16:38] Speaker B: Oh, JB, you always keep it fun.
[00:16:41] Speaker D: Well, here's a question. Do you think the state is going to change their definition of tangible personal property to include electronically delivered software and sales or SaaS.
[00:16:54] Speaker B: This is.
[00:16:54] Speaker C: It's got to be a Donna question.
[00:16:55] Speaker A: No, that's a Tim. How? That's a Tim Howe question.
[00:16:57] Speaker B: 100%. Well, also, Donna's pet peeve. Let's just be clear.
Donna and I do not want our Kindle purchases to be taxed. So that's why we're asking.
[00:17:08] Speaker A: Oh, okay.
[00:17:09] Speaker D: Special treatment.
[00:17:10] Speaker B: I know.
[00:17:12] Speaker C: So if you know a guy.
[00:17:13] Speaker B: Yeah, if you know anybody.
[00:17:15] Speaker A: But he doesn't make policy, he just enforces it. That's true.
[00:17:19] Speaker D: You know, again, I hate to say it, but that is a policy question. And whatever the general assembly decides, we will implement.
[00:17:27] Speaker A: Got it.
[00:17:28] Speaker D: And will.
[00:17:28] Speaker A: Got it. Okay. So. And I mean, that's really what a lot of people don't understand. I think you can elaborate on that. People think that policy comes from the department. Right. That policy is born out of the department, but it truly, and I love the fact that you've said that a couple of times now, that. No, that's why you even see in other states where somehow policy just completely bypasses common sense of the department and gets passed. We've got some friends in Illinois that are doing some fun things and a couple of other states that have done some fun things that are, frankly, unconstitutional, that people are challenging. And we love talking about them here. But, yeah. So if you could elaborate on that role of the department and what its true mission is.
[00:18:08] Speaker D: When I first came to the department, I thought, well, it'll be fun to dabble in policy.
But I learned pretty quickly that the legislature, that's their prerogative, and we have enough to do with implementing. And to be honest with you, I mean, sometimes we do go down to the General assembly and they ask us what we think. And particularly we have to say, you know, if you would change this or that, it would be much easier to administer.
And then we might remind them of a question that is not answered. We would much rather it be answered in the statute than have to come up with it in a regulation or a protest decision.
So we try not to make policy.
[00:19:00] Speaker A: Do you ask questions around legislative intent? Do you sometimes have to get down to that with the legislators and say, what were you guys trying to get to with this? Right.
[00:19:10] Speaker D: Well, and the answer is, we know because we attend the hearings.
[00:19:13] Speaker A: Got it. Got it.
[00:19:14] Speaker D: And so we hear the debates. We know that they're really after.
Now, Georgia, like a lot of states, it's not easy to research legislative intent, as I'm sure you guys know.
But generally we're going to try to enforce the law as written. And if we have to make decisions, you want to get it right.
And so we do a lot of thinking internally before we make a decision.
[00:19:46] Speaker B: Do you ever give them feedback? If you are having trouble implementing or hearing from taxpayers that there's an issue, does it ever go the other way where you just give feedback to the legislature?
[00:19:57] Speaker D: We certainly do, and I consider that to be part of our job because we're a good source of information for them in things that are difficult to administer or that are difficult for taxpayers. And so, yeah, we can suggest clarifications to them and let them know things that are difficult for us to administer.
[00:20:19] Speaker A: We got time for one more question.
[00:20:20] Speaker C: How do we do? How do we do in your bag? Do we finish them?
[00:20:23] Speaker D: No.
[00:20:23] Speaker C: Can we do it?
[00:20:24] Speaker D: Let's see.
[00:20:24] Speaker B: No, let's go for it.
[00:20:25] Speaker D: Do you think the state will move to centralized collection for all taxes, specifically alcohol?
We have centralized sales tax collection. Of course, alcohol excise taxes are at both levels. There's a state excise and a local excise. I haven't heard anything that would make me think that the local excise tax would be collected by us.
Now, we did get a law about three or four years ago that required us to have a centralized registration system for alcohol licenses. A little bit difficult to implement at first, but now everybody's used to the system and, you know, now instead of having to duplicate the process, there's one system and it's interesting that you asked the question, because nobody's asked me that before.
[00:21:15] Speaker A: Oh, wow. So here you go.
[00:21:17] Speaker B: Well, that's what we do on taxing poetic. We're just groundbreaking tax strategy.
[00:21:22] Speaker D: Say, I am impressed.
[00:21:23] Speaker A: Thank you. And thank you, sir, for taking the time out of your day. Frank, it was an absolute pleasure having you on and, you know, getting a chance to meet with you and. And having you answer some random questions. So with that, we got some tax stuff in there. Yeah, we did. Absolutely got some tax stuff in there. And once we sifted through JB's potpourri of questions.
[00:21:44] Speaker B: Yes, Mister Mcommissioner, I can't wait to call you on your gold phone. I'm thrilled to be your favorite podcast host. Thanks for saying that earlier.
[00:21:52] Speaker A: And thanks to Donna McMurray for lining this up. So thank you very much, Donna. We really do appreciate this.
[00:21:59] Speaker D: I hope I was a good enough sport that you'll invite me back sometime.
[00:22:02] Speaker B: Would you like to come back? We would love to.
[00:22:04] Speaker D: Not next week. But you know what?
[00:22:06] Speaker A: We would absolutely love to have you come back. We would love to have you come back on.
[00:22:10] Speaker B: Thank you. We know you're really busy, so thank you so much. And yes, on taxing poetic. Thank you so much for listening today. Just a reminder to our listeners, we have an entire library of episodes. You don't have to listen in order. We would love to have you listen to us on wherever you get your podcast. Thanks so much. Have a great day and join us next time.
[00:22:27] Speaker A: Go fighting Irish.
Yeah.
