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By Michael Lahti
As reported in Tax Analysts (a tax news service), the Massachusetts Department of Revenue on March 16 launched a limited 60-day amnesty that covers the corporate excise and some other tax types that were not included in the first fiscal 2015 amnesty.
The DOR also issued much-anticipated guidance on the amnesty, which Gov. Charlie Baker (R) signed into law February 13, 2015.
The DOR said the amnesty will run through May 15 and will cover the corporate income tax, which in Massachusetts is known as the corporate excise, as well as the following tax types:
- financial institutions tax;
- insurance tax;
- public utilities tax;
- estate tax;
- fiduciary income tax; and
- individual use tax on motor vehicles.
H 52 left it to Revenue Commissioner Amy Pitter to determine which tax types would qualify -- but mandated that the corporate excise be included. Under the program, those who pay what they owe -- including taxes and interest -- by the deadline will be eligible for a penalty waiver.
The DOR confirmed March 16 that the amnesty is by invitation only; the agency this week plans to begin sending a Tax Amnesty Notice to about 24,000 qualifying taxpayers to formally let them know that they are eligible. These are taxpayers who have already been billed by the DOR for their outstanding tax liability.
DOR spokeswoman Maryann Merigan told Tax Analysts that the total outstanding deficiency for the 24,000 taxpayers is approximately $690 million, which includes about $146 million in penalties. She said that about 95 percent of the overall liability is in corporate excise.
Each notice will include balances, the amount of unpaid penalty to be waived if the amnesty balance is paid in full by the due date, and the amnesty amount due, the DOR said in a statement. "This is an opportunity for taxpayers who are delinquent on their taxes, and were not included in the 2014 amnesty, to step up and pay their tax debt to support critical government services," Pitter said. "These taxpayers can catch up and pay their fair share without additional penalties."
The amnesty, enacted to help close a fiscal 2015 budget deficit, is projected by Baker to generate $18 million in revenue. It is the second amnesty that Massachusetts has offered in six months. The first was a 60-day amnesty that ran through October 31, 2014, and covered a number of tax types. But it did not cover the corporate excise, estate tax, or other levies covered in the current one.
Baker on March 4 proposed another amnesty as part of his fiscal 2016 budget. But unlike the two fiscal 2015 amnesties, the proposed one would run for a year, starting July 1, and would be aimed at non-filers -- including those that have not previously filed in Massachusetts (non-registrants) -- as well as taxpayers who are known to the DOR but have not filed and have not yet been assessed by the department for failing to file, Baker said.