UPDATE: The state of Iowa has partnered with a tech company to let some businesses pay taxes using the online application Dwolla.
Dwolla — the name is a combination of “dollar” and “web” — is a Des Moines-based e-commerce company that charges a flat rate of 25 cents for every transaction of more than $10. Traditional credit card companies typically charge a percentage rate of the transaction.
To start, the state is accepting Dwolla payments only from the 50 or so businesses that account for $150 million in cigarette stamp taxes the option of using Dwolla, but could expand the service in the future to other taxes.
“We’re looking at this for other areas as well,” Gov. Terry Branstad said during a Tuesday news conference where he was joined by Dwolla founder and CEO Ben Milne and Iowa Department of Revenue Director Courtney Kay-Decker.
“Right now, the cigarette tax system is paid for on an entirely paper basis, so it’s a slow process for taxpayers, and it’s a slow process for us,” Kay-Decker said. “We are confident that this is just the tip of the iceberg for the Department of Revenue, and we believe this will be a payment option that comes for all taxpayers.”
As of April 2012, Dwolla had 100,000 users of its application and 15,000 businesses accepted payments through its system, said Jordan Lampe, director of communications for the company.
The partnership doesn’t involve any type of exclusivity contract, nor did either side pay the other for the opportunity. Branstad said it was “just another option” being made available to taxpayers.
“This partnership is about creating a more sustainable, responsive, and convenient business climate for the state and its taxpayers, both today and tomorrow,” Milne said.