Individual Income Tax Insights: 2015 State Tax Amnesty Programs Collectively Reap Over $200 Million in Delinquent Tax Collections So Far


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Most of the 2015 tax amnesty programs are coming to a close.  As of date, seven state programs have come to, or are nearing, completion – Arizona, Indiana, Kansas, Maryland, Massachusetts, Missouri (ends Nov. 30) and Oklahoma.  The wrap up of two state tax amnesty programs came with blockbuster announcements.  Oklahoma’s tax amnesty PAYRight OK program came to an end Nov. 13 having collected over $129 million in past-due taxes.  Similarly, Indiana’s Department of Revenue collected more than $68.4 million as of Nov. 9.    

Generally, state tax amnesty programs offer individuals and businesses a fresh start by allowing taxpayers to come forward with, and pay, certain delinquent taxes.  Depending on the state, amnesty participants are given a full waiver, or reduction, of penalties, interest and fees.  Tax amnesty programs are offered for a limited time, generally between one to two months.   

In addition, amnesty programs are fraught with rules and eligibility requirements.  In Massachusetts, participants waive any right to contest liability for the amount paid pursuant to amnesty.  Therefore, participation in any amnesty program should be researched thoroughly. 

Some states raised more taxes than expected via these programs.  Oklahoma’s $129 million collection more than triples the anticipated $35 million of past-due payments.  Also tripling expected collection was Arizona, which raised more than $46 million from its amnesty program, beating the state’s $15 million estimate, the Arizona Daily Star reported.  While other states met their stated target, Massachusetts met its target by raising $18.6 million in delinquent taxes.  Similarly, Indiana is meeting collection benchmarks and on its way to collect its’ $90 million collection goal, the IndyStar reported.     

Three state amnesty programs are in the pipeline.  Alabama’s tax amnesty program begins sometime next year.  Louisiana and New Hampshire’s amnesty programs begin Dec. 1.  Louisiana’s one-month amnesty program got off to a delayed start due to a mistake with the information included in the state’s amnesty invitation letters.     

Continue the discussion on Bloomberg BNA's State Tax Group on LinkedIn:  Should more states offer tax amnesty programs to collect delinquent taxes? 

For more information about state tax amnesty programs, sign up for a free trial of the Bloomberg BNA Premier State Tax Library today. 

By:  Genie Nguyen 

Follow Genie on Twitter at:  gNguyen_SALT

Follow BBNA on Twitter at: @BBNATax