Louisiana taxpayers will have two months starting in late September to settle their delinquency issues with the state in return for reduced penalties, the Department of Revenue announced Tuesday. The tax amnesty program, estimated to garner the state $200 million this year, will run from Sept. 23 to Nov. 22. The "Fresh Start" program was designed to fill gaps...
Louisiana taxpayers will have two months starting in late September to settle their delinquency issues with the state in return for reduced penalties, the Department of Revenue announced Tuesday. The tax amnesty program, estimated to garner the state $200 million this year, will run from Sept. 23 to Nov. 22.
The "Fresh Start" program was designed to fill gaps in the budget for the fiscal year that began July 1, while also providing a way for delinquent taxpayers to pay their back taxes. For those who qualify for the program this year, 100 percent of the penalties and half of the interest will be waived.
Two other one-month amnesty windows will be available in the next two years, but under different terms. For those who qualify in 2014, only 15 percent of the penalties will be waived; in 2015, this will be reduced to 10 percent.
All delinquent taxes administered at any time by the Department of Revenue, except for motor fuel taxes, are covered under the program. Those involved in criminal cases due to nonpayment or fraud are ineligible.
Revenue Secretary Tim Barfield hailed the announcement Tuesday as a straightforward method to assist delinquent taxpayers in making up for past mistakes: "This is a time for all Louisiana taxpayers to get a fresh start with their taxes. We have worked to make this process very simple and easy to use."
He added electronic applications are the speediest way to complete the process. Those eligible for the program will begin receiving notifications from the department shortly.
The tax amnesty program was first envisioned as part of Gov. Bobby Jindal's tax overhaul plan to do away with income and corporate taxes. While Jindal scrapped the plan on the first day of the legislative session after widespread opposition from the business community, lawmakers resurrected the amnesty program later in the session to fill gaps in the state's $25.4 billion budget.
According to an analysis from the Legislative Fiscal Office, the state estimates around 300,000 people owing $700 million in back taxes will be eligible for the amnesty program, but only 30,000 or so are expected to participate.
While this year's budget relies on the program to bring $200 million to help pay for the state's Medicaid program, economists and officials have disagreed over the likely revenue that could be generated. If the dollar amount isn't reached, health care funding in the state would take the hit.
Tax amnesty programs have been offered five times in Louisiana since 1985. The last time such a program was offered in 2010, the state garnered $482.7 million in revenue.