Propose 3-Month Program; Cite Success in Previous Amnesty Programs
(TRENTON) – Assemblyman Robert Karabinchak and Assembly Speaker Craig Coughlin on Thursday proposed a 3-month state tax amnesty program to help raise revenue that would go toward protecting the interests of New Jersey’s families.
“This works,” said Karabinchak (D-Middlesex). “We must consider all alternatives in these difficult budget times, and this is one that has proven to be effective and would be beneficial to everyone. We need to explore all options.”
“Every potential dollar counts,” said Coughlin (D-Middlesex). “We must consider every possible option to find money, and we know tax amnesty programs work without burdening New Jersey’s families. This is an effective and common sense way to raise money that the state otherwise likely wouldn’t collect to help ease budget concerns and protect our families. It needs to be part of the debate as we consider state spending in the weeks ahead.”
A two-month tax amnesty program in late 2014 helped raise about $75 million from more than 26,000 people and businesses who settled their outstanding debt. A 2009 tax amnesty program raised $725 million, while a 2002 program raised $277 million. A 1996 tax amnesty raised $244 million.
The proposal would establish a 3-month tax amnesty program starting July 1.
The amnesty would apply only to state tax liabilities for tax returns due between Jan. 1, 2014 and Dec. 31, 2016.
During the amnesty period, a taxpayer who has failed to pay any state tax can pay the tax, interest due and costs of collection without the imposition of recovery fees, civil penalties and criminal penalties arising out of the late payment.
The Treasury Department would be able to advertise the tax amnesty program for 30 days.
Karabinchak and Coughlin note the amnesty would not be available to a taxpayer who, at the time of payment, is under criminal investigation or charge for any state tax matter.
A taxpayer eligible for the amnesty who fails during the amnesty period to pay taxes owed will incur a 5 percent penalty. The penalty will be in addition to all other penalties, interest or collection costs otherwise authorized by law.
“A tax amnesty program has proven effective, and any money it brings in will be helpful,” Karabinchak said. “This should be part of the discussion moving forward.”
“This is a great opportunity for people and businesses to settle their outstanding debt and for the state to take advantage of a viable option to increase revenue,” Coughlin said. “This has worked well in the past and we have no reason to think it wouldn’t work well again.”