Tax department selects Fast Enterprises' GenTax; warns lawmakers to delay form/distribution changes until 2027

Kristen Collins of the Virginia Department of Taxation updated the Senate subcommittee on the multi‑year tax‑system replacement. She said the agency issued an RFP in 2024 and selected Fast Enterprises to implement GenTax, a commercial off‑the‑shelf product that the vendor supports in 34 states.

"We entered into an RFP with a vendor, and that vendor is called Fast Enterprises... They have done this software called GenTax," Collins said. Under Fast’s model, teams are co‑located and the first phase will roll out in September with sales tax, withholding and smaller taxes; later phases include corporate and individual income tax and a final phase in 2029 for remaining taxes.

Collins emphasized the conversion and testing schedule and the risk of late legislative changes. Business testing is scheduled to start in early March, and she said changes to return lines or distribution formulas after testing begins would force duplicated testing, add contractor resources and increase the risk of processing errors and distribution delays. For those reasons the vendor recommended deferring substantive legislative form/distribution changes until 01/01/2027; changes to reference data or simple rate changes could be accommodated by Oct. 1, 2026.

She gave examples: adding a new return line (for example a retail delivery fee) or changing the distribution formula would be form changes that require a delayed effective date; expanding the tax base without changing distribution could potentially be accommodated sooner.

On automation and AI, Collins said the department and vendor are discussing potential interfaces but cautioned about safeguards to avoid taxpayer data disclosure. She said the department will map later phases (corporate and individual income tax) after the session and communicate which kinds of legislative changes would need delayed effective dates before next session.

Next steps: Tax staff will follow up with mapping for phases 2–4 and provide guidance to the General Assembly about which bills could be implemented in the new system and which would require delayed effective dates to avoid conversion risk.