1. FTA Technology Conference Emergence of Tax ASPs Kennon Walthall

2. Fast Facts about ASP’s Size of Market u$1 Billion in ‘99 grows to more than $25.3 Billion by 2004 u480 retail ASPs (more entering the market every day) Why ASP’s? uthe opportunity to secure Tier 1 application functionality while forgoing significant infrastructure, software and personnel uLower total cost of ownership (estimated between 30% and 70%) Future u“My Vision is that in five years, people won’t be running any applications inside their business.” Chandrasekhar, ePolly

3. Examples uEmployease: Human resource services uIcarian: Recruiting and work force management uManagemark: travel and expense reports uCritical Path: Outsource email services uWebEx: communications and collaborative apps. uNationtax: business tax filing

4. Why emergence of Tax ASP’s uTaxpayers starting to demand the ability to converse with govt. online uGovt.'s want to operate more efficiently uTaxpayers and Govt.’s: Getting rid of paper lower costs as well as increase compliance uCredit Card industry

5. How it works Business Tax ASP IRS State data acknowledgments acknowledgment data Local acknowledgement data

6. General advantages/disadvantages to users Advantages Potential of “one-stop” shopping Allows taxpayer to register, prepare, file and pay Stores Historical Information No lines, no postage, immediate confirmation Disadvantages Lack of consolidation/ability within different levels of govt. Flexibility of data Entry Privacy/Signature Issues

7. Reach or breadth of an ASPs service what can be included Integration with current business function: Accounting / Payroll / HR Any information sent to govt. on paper One stop for registration, preparing, file & pay Historical information Email communication/reminders Account maintenance Immediate confirmation

8. Customer support issues States Terms of Agreement/MOU/Contract Communication of Responsibility Taxpayers Tax related questions vs. application questions Communication of Responsibility Hours Email Return Live Voice

9. Government ASP Set Up and Maintenance vs. a 3 rd Party Set UP Third Party Partner tDedicated IT resources tSpeed of implementation tOngoing enhancements tBest practices perspective tCross govt. filing/paying etc. In-House tControl of all IT resources tFull accountability tEnhancement flexibility tNo perceived conflict of interest Which option best serves your taxpayers?

10. Cost Models/Options uGovernment Pays or Taxpayer Pays uPer Transmission uMonthly Fee uCombination