Texas Tax Amnesty Program – Should You Participate?

Denver business owners spend most of their time focused on enhancing the profitability of their company through new product and service offerings, account management, new customer acquisition and other administrative tasks. The last thing they think about are taxes – especially sales tax. However, as states continue to change their tax laws it is becoming more common for companies without a physical presence in a state to be required to collect sales tax. Beyond this, companies may also be required to pay use tax for various business activities. Unfortunately, many business owners are unaware of this because of the pace at which laws change and lack of familiarity with existing regulations. The good news is many states offer tax amnesty programs that are designed to allow companies with tax issues to come into compliance with limited fees and penalties. The state of Texas is currently offering such an opportunity through their tax amnesty program and it’s an excellent chance for affected Denver companies to participate. To help clients, prospects and others understand the program and its benefits, Hanson & Co has provided a summary of key details below.  

Effective Date

The tax amnesty program is currently in effect and will end on June 29, 2018. It’s important to note that any unreported or underreported taxes which were incurred in this year are not eligible for the program. Only those which were incurred prior to January 1, 2018, are eligible.

Program Details

  • Eligibility – Companies are eligible to participate if they did not file for periods prior to January 1, 2018 or have underreported tax or fees due for any reason including misapplied tax credits. Please note that any taxpayer that has been notified that a period or periods are delinquent and are scheduled for an audit review, or are currently under review, are not eligible to participate for those periods. Any company that is currently in litigation or has reached a reduced settlement with the state is also not eligible to participate.
  • Program Benefits – Eligible companies will receive a waiver of state penalties and interest for the affected periods. Unfortunately, the program doesn’t provide for a limited lookback period which means those companies with long-term compliance issues may seek to receive more favorable compliance terms through the Comptroller’s Business Activity Research Team for a voluntary disclosure agreement as they often specify a limited lookback period.
  • Eligible Taxes – All state and local taxes (including sales tax) administered by the Comptroller’s office are eligible under the tax amnesty program except for the public commission gross receipts tax. It’s important to note that the sports and community venue tax, property tax, unclaimed property program and IFTA taxes are not eligible under the amnesty program.
  • Program Participation – In order to participate in the program, a qualified taxpayer would submit a paper report and write “Amnesty” across the top of the return and send along the corresponding tax payment. In the event you are submitting an amended return, simply send the corrected report to the Comptroller following the same instructions as highlighted above. It’s important to note that all filings must be submitted by paper and through the U.S. post office. The state is not accepting electronic filings or e-payments for this program.

Contact Us

It’s important to remember that you should speak to a qualified professional before contacting the state to get the best advice for your situation. Texas also offers a voluntary disclosure program which may be more appropriate for you based on the specifics of your situation. If you have questions about whether your company can benefit from the program or need assistance with another tax issue, Hanson & Co can help. For additional information please call us at 303-388-1010 or click here to contact us. We look forward to speaking with you soon.

TaxNate Galuzzi