September 30, 2015
This month, Alabama and New Hampshire enacted tax amnesty programs for 2016. These programs provide a time-sensitive opportunity for taxpayers to pay outstanding tax liabilities in exchange for reduced interest and penalty charges and protection from future legal action.
Alabama recently enacted the Alabama Tax Delinquency Amnesty Act of 2016. Except for motor fuel taxes, the amnesty program applies to all Alabama taxes due prior to January 1, 2015 or taxes for taxable periods that began prior to January 1, 2015.
The program provides amnesty to taxpayers who submit an application and pay all taxes and fees due to the Alabama Department of Revenue if remitted during a two-month period in 2016 that has yet to be announced. If the application is approved, one-half of the interest payment and all penalties associated with the tax payment will be waived.
In New Hampshire, the state legislature recently enacted by override its 2016-2017 budget bill, providing a tax amnesty program during a short window of time from December 1, 2015 until February 15, 2016.
The amnesty program relieves businesses of the obligation to pay “all penalties and interest in excess of 50 percent of the applicable interest rate” when unpaid taxes are reported and paid in full. The amnesty only applies to unpaid taxes due on or before February 15, 2016.
The Legislature made clear that the amnesty is a one-time offer: After the amnesty period, "the department or any … court … shall have no cretion to waive, abate, reduce, or remit, for good cause or any other reason, any penalties assessed with respect to taxes … due before December 1, 2015.”
Clients are advised to consider the advantages of these programs if they have tax compliance concerns in Alabama and/or New Hampshire. If you have questions or are interested in pursing amnesty or voluntary closure agreement opportunities with state tax authorities, contact Allison Rule, co-chair of the Communications Taxes & Fees Practice Group, at email@example.com.