Tax Tip

April 24, 2012

State Tax Amnesty Programs on Deck for 2012: Ohio, Texas and Kentucky

In an effort to encourage taxpayers to come into compliance, states are once again turning to tax amnesty programs. While the benefits and scopes of these offerings always vary by state, they all give delinquent taxpayers an opportunity to pay overdue taxes while minimizing or eliminating penalties and interest. Listed below are three states that are utilizing this tried and true amnesty approach in 2012.

OHIO

This state is planning to run a General Amnesty Program from May 1 through June 15, 2012. The program applies to all Ohio state taxes, except the consumer use tax which has its own amnesty program that is currently running. Through General Amnesty, Ohio will waive onehalf of the interest and all penalties owed on qualifying delinquent tax debts. To be eligible, taxpayers must have owed taxes on May 1, 2011. They cannot have been issued a billing, assessment, or audit notice for any tax or periods for which they are applying for amnesty. In order to participate, an application must be submitted and all back returns and taxes must be filed. There is no limited look-back with this program.

View more information and applications for the program from the state.

The Ohio Consumer’s Use Tax Amnesty Program actually began on October 1, 2011 and will end on May 1, 2013. The program applies to use taxes due on purchases made on or after January 1, 2009. Through this program, the state will waive all use tax liability that has not been assessed for any periods prior to January 1, 2009. Consumer’s use tax paid under amnesty is not subject to interest or civil or criminal penalties. However, if you are registered for Ohio use tax as of or prior to June 1, 2011, you will be required to pay interest on any under-reported or unreported consumer’s use tax. The state has established a website for this program which contains all the information needed to participate in the program.

View State Website.

Texas

This tax amnesty covers most taxes and fees that were originally due to the Texas Comptroller of Public Accounts before April 1, 2012. The program begins June 12, 2012 and concludes August 17, 2012. The only tax administered by the Comptroller that the amnesty does not apply to is the Public Utility Commission gross receipts tax. In order to participate, all back taxes must be paid. There is no limited look-back with this program. The procedure is simple: file all back returns owed and write “amnesty” on all returns, applications, checks, or money orders being filed as part of the program.

This tax amnesty covers most taxes and fees that were originally due to the Texas Comptroller of Public Accounts before April 1, 2012. The program begins June 12, 2012 and concludes August 17, 2012. The only tax administered by the Comptroller that the amnesty does not apply to is the Public Utility Commission gross receipts tax. In order to participate, all back taxes must be paid. There is no limited look-back with this program. The procedure is simple: file all back returns owed and write “amnesty” on all returns, applications, checks, or money orders being filed as part of the program. All documents must be submitted in paper and all payments must be made via check or money order.

Visit Texas Program Website.

Kentucky

While this program has not officially been approved, it is tentatively scheduled to run for a period of no less than 60 days and no more than 120 days during the fiscal period ending June 13, 2013. The exact beginning and end dates have not yet been determined. Kentucky will waive interest and penalties on tax liabilities arising between December 1, 2001, and October 1, 2011. This program will apply to all taxpayers owing most taxes, penalties, fees, or interest subject to the administrative jurisdiction of the Kentucky Department of Revenue (e.g. Sales & Use, Corporate Income, Individual Income, Pass Through Entities, etc.). The program will not apply to ad valorem taxes levied on real property pursuant to KRS Chapter 132, ad valorem taxes on motor vehicles and motorboats collected by the county clerks, and ad valorem taxes on personal property levied pursuant to KRS Chapter 132 that are payable to local officials.

If you have any questions or concerns, please contact a State and Local Tax Team member at taxbriefs@withum.com.