PARSIPPANY, N.J. - Jackson Hewitt Tax Services has reported it doesn't have a contract with a bank to provide capital for its full refund anticipation loan program and won't have a program in place when tax season begins next week. Intuit also said it was possible that all ProSeries customers who want RALs won't be able to get them.

The tax software companies’ problems with bank products stem from the December decision by the Office of the Comptroller that Santa Barbara Bank & Trust, a subsidiary of Pacific Capital, would not be allowed to participate in refund loans programs. Santa Barbara has recently reached an agreement to sell the tax products business to Santa Barbara Tax Products Group. Jackson Hewitt has also reached an agreement with MetaBank, a federal savings bank, to provide Assisted Refunds. However, the new group isn't providing RAL funding. The chain had previously announced Republic Bank would fund 50 percent of the RAL program.

Rival Liberty Tax, which had announced its program would be funded by Republic Bank, said its program is fully funded. Intuit is utilizing the new Santa Barbara group, which is essentially the intact Santa Barbara Bank operation, to provide refund transfers for ProSeries customers. An Intuit spokesman said that, "Although SBTPG will not be offering refund anticipation loans (RALs) this tax season, Refund Advantage is available to handle some level of RALs for ProSeries customers’ clients who qualify, based on Refund Advantage’s eligibility."

Intuit differs from the tax chains in that it does not participate in the RAL program and the company said the largest part of its customers use the refund transfers. Jeff Gramlich, president of CCH's Small Firm Services unit said his organization has RAL funding for its TaxWise and ATX customers.

Those who can get RALs from Republic will be paying less for them. The company's Tax Refund Solutions operation, which provides bank products, said it has dropped the finance rate charges on RALs. This year, a RAL of $3,500 would have a cost $57.25, compared to $123.70 last year. Those fees include the interest rate and an administrative fee of $29.95. The company anticipated a 27 percent decrease in charges for RALs of $1,000 or less.