Agency turns to XML for tax returns

California State Board of Equalization

The California State Board of Equalization plans to allow businesses to file sales and use tax returns online and use Extensible Markup Language (XML) to store and retrieve such data.

The project is set to launch early this month. The state agency would enable businesses to file tax returns through certified third-party Internet application service providers, according to project manager Ray Greenhouse. The ASPs would then transfer the data to the state agency, which will use XML as middleware.

"The advantage of using XML is that it allows us to keep our proven mainframe systems in place without having to modify them," Greenhouse said. "The Board of Equalization recognizes that XML is the electronic data interchange format of the future. It's helping us to move into e-government."

By employing XML as the standard application, data can be input from a Web-based application to the mainframe without having to replace any existing technology infrastructure, said Timm Bohlmann, manager of system engineers with German firm Software AG, which supplied the agency with the product.

While HTML (Hyper Text Markup Language) describes how data should be presented on a Web page, XML describes the information. It allows businesses and agencies to read and interpret data from each other even if they have different applications.

"XML describes the content, structure and meaning of the data," said Bohlmann. "It's got a very fast curve of usage because it's very easy to use. So for applications over the Web, it's got a big benefit."

Data, Bohlmann said, would be stored in a native XML information server. It stores, retrieves, and exchanges data in XML naturally without needing to convert to other formats.

Greenhouse said the state Board of Equalization's program, which has been in development for about a year, is voluntary, and businesses could still file using paper. He said the state agency has certified one ASP, but said several other companies are interested in providing the online filing service.

He said one feature of the agency's online filing program is that everything can be done in real time. A business filing through an ASP can find out instantly whether it is eligible to file a return.

In California, about 700,000 businesses are eligible to file sales and use tax returns.