Does IT Modernization Affect Tax Take?

We find that, for many categories of taxes, states that have upgraded their tax-processing systems see statistically and economically significant increases in collections relative to states that have not. Specifically, we detect positive impacts for amusement taxes, tobacco taxes, motor vehicle licensing taxes, individual income taxes, and severance taxes in states that have followed this approach to the procurement of tax-processing systems. We find no evidence that financial administration expenditures increase for these states