In Brief: Amex Touting Its Online Tax Service.(Brief Article)

American Banker February 9, 2004 | Kuykendall, Lavonne American Express Co. said it has begun intensively promoting its year-old online tax preparation business for the first time, mainly through cardholder statements and mailings.

Last year’s offering was a pilot test, a spokeswoman said Wednesday. She would not say how many customers used the service and would not detail this year’s marketing plan. americanexpressonlinenow.net american express online

Intuit Inc. of Mountain View, Calif., which sells the popular tax preparation software TurboTax, is the largest online tax preparer. Scott Gulbransen, an Intuit spokesman, expressed skepticism about Amex’s prospects in the market. this web site american express online

Intuit has been offering a Web-based tax service since 1998. Years of research and development have made it easier to use than rival services, he said.

The 2.4 million Americans who used Intuit’s online service last year gave it a 71% market share, Mr. Gulbransen said. H&R Block Inc. was No. 2 — its TaxCut had about 28% — and smaller providers divided the rest, he said.

Amex said it will charge $34.95 until March 31 and $39.95 thereafter for American Express Online Tax to calculate state and local taxes and file electronically. The TurboTax service charges $19.95 for a federal return and an additional $19.95 for a state return.

A Merrill Lynch & Co. analyst, Gregory Smith, said the Amex entry is not a significant threat to Intuit’s “large and lucrative tax business.” The Amex service is “much more rudimentary” than Intuit’s and H&R Block’s, he wrote in research note on Intuit issued Wednesday.

CCH Inc., a tax and accounting technology company in Riverwoods, Ill., developed the Amex service.

Kuykendall, Lavonne