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Karabinchak & Coughlin Bill to Establish Six-month Tax Amnesty Period Passes in Assembly

Legislation sponsored by Assemblyman Robert Karabinchak and Assembly Speaker Craig Coughlin to establish a six-month State tax amnesty period, that would end no later than December 31, 2018, for tax returns due on or after January 1, 2012 was approved 55-20 Thursday by the full Assembly.

“This bill (A3438) will help eligible tax payers who, for a variety of reasons, are in arrears with their state taxes,” said Karabinchak (D-Middlesex). “A job loss, health crisis or even a family emergency can change a person’s financial picture. This bill would provide relief and a means to satisfy such outstanding debt.”

“It’s very easy to pass judgment on someone who has fallen behind on their taxes,” said Coughlin (D-Middlesex). “Yet the reality is, each person’s financial situation is unique. Life happens, and finances can change for the worse very quickly.”

During the amnesty period, a taxpayer who has not paid a state tax can pay the tax and one-half of the balance of interest that was due as of May 1, 2018, recovery fees, civil penalties and criminal penalties arising out of the late payment. A taxpayer who, at the time of payment, is under criminal investigation or charge for any State tax matter is not eligible for the amnesty.

Amnesty covers all state taxes payable to the New Jersey Division of Taxation including the Corporation Business Tax, Sales and Use Tax, and Gross Income Tax. Taxes not administered and collected by the division, such as local property taxes, realty transfer fees, and federal liabilities are not covered.

If a taxpayer eligible for the amnesty fails to pay the taxes owed during the amnesty period, that taxpayer would be subject to a five percent penalty which may not be waived or abated. The five percent penalty would be in addition to all other penalties, interest, or collection costs authorized by law.

The bill was introduced and referred to the Assembly Budget Committee on March 5. It was released out of the Committee on June 18. The bill now awaits further consideration by the Senate.