Amy Komlanc

If you are aware of a possible liability or think your company has nexus, the amnesty programs listed below may help you avoid penalties and interest. State tax amnesty programs are a great opportunity to waive penalties and interest. Voluntary disclosure programs typically do not waive interest. The following states have enacted amnesty programs that allow businesses to remit taxes for prior periods with the benefit of waiving some combination of penalties, interest or fees:

District of Columbia:  August 2, 2010, to September 30, 2010

Taxpayers can pay outstanding taxes and interest and have penalties and fees waived. A special website has been established for the program. The tax amnesty covers all tax due prior to December 31, 2009, and applies to all taxes except real property taxes and the ballpark fee.

Florida:  July 1, 2010, to September 30, 2010

Florida is offering the opportunity to pay overdue taxes with no penalty and reduced interest for liabilities due before July 1, 2010. All taxes are eligible except unemployment tax and Miami-Dade County Lake Belt Fees. A tax amnesty agreement can be submitted online.

Illinois:  October 1, 2010, to November 8, 2010

The Illinois amnesty program will apply to taxes due to the state of Illinois for the taxable period between June 30, 2002, and July 1, 2009. Penalties and interest will be waived.

Kansas:  September 1, 2010, to October 15, 2010

Kansas is waiving all penalties and interest for tax liabilities due on or before December 31, 2008. The following taxes are included:  retailers’ sales, compensating use, corporate income, individual income, franchise, withholding, homestead, cigarette and tobacco, liquor drink, liquor enforcement, estate, fiduciary income and mineral severance. An application can be requested by calling the Kansas Department of Revenue at 785.296.6121.

Nevada:  July 1, 2010, to September 30, 2010

Nevada enacted a one-time penalty and interest amnesty program that waives penalties and interest, provided the outstanding tax debt is paid in full during the amnesty period, for taxes due before July 1, 2010. An application is available at the Nevada Department of Taxation website. Included are sales & use tax, modified business tax, outstanding business license fees payable to the department due on or before September 30, 2009, cigarette tax, other tobacco products tax, liquor tax, bank branch excise tax, insurance premium tax, tire tax, live entertainment tax (non-gaming), short term lessor (passenger car), exhibition facilities fees, property taxes that are centrally assessed and net proceeds of mineral tax.

New Mexico:  June 7, 2010, to September 30, 2010

New Mexico Tax Relief is a program that offers relief from interest and penalties associated with unreported state taxes that were due prior to January 1, 2010. An application is available at the New Mexico Taxation and Revenue Department website.

Tax amnesty programs can generate a one-time revenue boost for states, provide a method for taxpayers to improve overall compliance and clear any outstanding tax liabilities and limit costs associated with penalties and interest. Typically after a program has ended, taxpayers with outstanding liabilities who qualified for amnesty but did not participate are subject to much higher interest rates.

Contact your BKD advisor for guidance on state tax amnesty programs in your area.