September marks the beginning of the busy 2015 tax amnesty season. This year, Arizona, Indiana, Kansas, Maryland, Missouri and Oklahoma are offering tax amnesty programs that begin this month. While the specific details of these programs vary, they generally offer some abatement of penalties and/or interest in exchange for the filing and payment of delinquent returns and taxes. Recently, state legislatures have looked to tax amnesty programs to provide a boost to increasingly tight state budgets.
Arizona, Kansas, Maryland, and Missouri commenced their programs on Sept. 1, while Indiana and Oklahoma will launch their programs later in the month.
Arizona taxpayers may seek full abatement of interest and civil penalties through the Tax Recovery Program. Annual taxpayers may seek amnesty for any tax year ending on or before Dec. 31, 2014 while other taxpayers may seek amnesty for any tax period ending on or before Jan. 31, 2015. The program covers Individual Income, Corporate Income, Transaction Privilege (Sales), and Use Tax. In order to qualify, taxpayers must file or postmark program applications and pay the entire tax due by Nov. 2.
The Indiana Tax Amnesty Program offers amnesty for tax periods ending on or before Dec. 31, 2012 and covers all tax types managed by the Indiana Department of Revenue. For participating taxpayers who pay the outstanding base tax in full, the department will waive penalty, interest and collections, release tax liens for existing liabilities and decline to pursue civil or criminal prosecution. The program ends on Nov. 16, 2015.
The Kansas Tax Amnesty Program covers tax periods ending on or before Dec. 31, 2013 and offers full abatement of interest and penalties in exchange for full payment of delinquent taxes by Oct. 15. The eligible tax types are Income Tax (individual, corporate, fiduciary), Privilege Tax, Estate Tax, Withholding and Estimated Tax, Sales Tax (state and local), Compensating Use Tax (state and local), Liquor Enforcement Tax, Liquor Drink Tax, Cigarette and Tobacco Products Tax and Mineral Severance Tax.
Maryland taxpayers who are approved for the Tax Amnesty Program will be granted abatement of all civil penalties and 50 percent of the accrued interest. The program covers tax liabilities for returns due on or before Dec. 31, 2014. Taxpayers can either pay the full tax due upon submitting their amnesty application or pay 10 percent of the tax due with the application and establish a payment agreement to satisfy the remaining balance. The eligible tax types are Corporate Income Tax, Personal Income Tax, Fiduciary Income Tax, Sales and Use Tax, Admissions and Amusement Tax, Employer Withholding Tax and Pass-Through Entity Nonresident Income Tax.
The Missouri Tax Amnesty Program covers taxes that were due on or before Dec. 31, 2014 and offers full abatement of interest and penalties in exchange for full payment of the tax due. The eligible tax types are Consumer’s Use Tax, Corporation Franchise Tax, Corporation Income Tax, Employer Withholding Tax, Fiduciary Tax, Individual Income Tax, Sales Tax, and Vendor’s Use Tax. The amnesty program will run for 60 days, ending on Nov. 30, 2015. All documentation and payments due under the program must be postmarked by this date.
The Oklahoma Voluntary Compliance Initiative covers tax periods ending on or before Dec. 31, 2014 and offers a full waiver of penalty, interest and any other collection fees or costs due to taxpayers who voluntarily file delinquent returns and pay the outstanding tax by Nov. 13. The qualifying tax types are Mixed Beverage Tax, Gasoline and Diesel Tax, Gross Production and Petroleum Excise Tax, Sales and Use Tax, Income Tax, Withholding Tax and Privilege Tax. Oklahoma will allow taxpayers to establish a short-term payment plan if they are unable to pay the full tax due during the compliance period.
None of the amnesty programs beginning this month lasts more than 60 days, so taxpayers must respond quickly to meet the deadlines. Also, amnesty programs generally exclude those involved in civil or criminal proceedings, whether related or unrelated to the relevant tax. Taxpayers engaged in such matters should closely review the specific amnesty program rules to determine their eligibility.
For more information about state tax issues, sign up for a free trial of the Bloomberg BNA Premier State Tax Library .
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