In the recent past, States have increased their enforcement of state and local tax regulation laws and associated collections.
Most enforcement efforts focus on local and out of state taxpayers that have one or several unpaid tax liabilities. Often taxpayers are surprised to learn of a liability because they are not aware of each state’s (constantly changing) tax laws. The good news is that on occasion states offer tax amnesty programs designed to encourage compliance. In 2017, Pennsylvania is offering a new tax amnesty program to bring delinquent taxpayers into compliance. Colorado companies and others with business ties to Pennsylvania may qualify to take advantage of this program. To help clients, prospects and others under the program, Hanson & Co has provided a program overview below.
Individuals, businesses and other entities that have an unreported tax obligation as of December 15, 2015, are generally able to participate in the program. It’s important to note that eligibility is available whether the liability is known or unknown to the Pennsylvania Department of Revenue. Non-filed tax returns or reports including under-reported tax liabilities are eligible for the program well. What makes the eligibility slightly unique is that participation is available even if the Department of Revenue is aware of the issue.
Several taxpayers are excluded from program participation including those that participated in the 2010 amnesty program, those under criminal investigation, those named as defendants in a criminal complaint, those in litigation for accused violation of any law imposing an eligible tax, and taxpayers with a voluntary disclosure agreements currently in place.
There are over thirty taxes which are eligible for the tax amnesty program, below we have listed the ones that apply to the greatest number of taxpayers.
Corporate Net Income Tax
Capital Stock/Foreign Franchise tax
Sales and Use Tax
Employer Withholding Tax
It’s important to note that the program doesn’t apply to Unemployment Compensation and taxes levied by other states and the federal government.
Application & Benefits
To participate in the program a taxpayer must apply and other documentation between April 21, 2017 and June 19, 2017. Applications submitted after the deadline will not be accepted. Failure to participate in the amnesty program can result in post program penalties being assessed. Accepted taxpayers with unknown tax liabilities reported and paid during the amnesty period will not be liable for any taxes of the same type due prior to January 1, 2011.
This program is an excellent opportunity for Colorado companies with known Pennsylvania tax issues to come into compliance. It’s also a good opportunity to conduct a nexus determination study to determine if any outstanding liabilities exist. Before communicating with the State it’s essential to review your situation with a tax advisor to ensure you qualify. For additional information on the program or for assistance with other state and local tax issues, Hanson & Co can help. For more information call us at (303) 388-1010, or click here to contact us. We look forward to speaking with you soon.