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On July 1, 2010, Florida and Nevada launched two separate tax amnesty programs, both are slated to expire September 30, 2010.  These tax amnesty programs are the latest of many state programs intended to raise large amounts of tax dollars to assist with the delicate budget balancing tasks facing the states.  The Florida and Nevada programs represent another opportunity for delinquent taxpayers to voluntarily pay overdue taxes with no penalty and no, or reduced, interest.

Florida Amnesty

1.         Benefits Available

The Florida program requires taxpayers who come forward with a tax liability unknown to the Florida Department of Revenue (“Florida Department”) to pay only half the interest due.  If the Florida Department already identified the tax liability by jeopardy assessment, or other assessment, or had already scheduled an audit, the taxpayer will be required to pay 75% of interest due.  Moreover, all taxpayers who come forward and pay their outstanding liability will receive a complete waiver of penalty.  However, for any known debt greater than ninety days, the Florida Department will impose a 10% administrative collection processing fee, which cannot be waived.

2.         Taxes Subject To

The Florida tax amnesty program applies to all taxes administered by the Florida Department, except unemployment tax and Miami-Dade County Lake Belt Fees.

3.         Qualification For

Pursuant to the Florida program, individuals or businesses are eligible for the program if the liability for tax, penalty or interest was due on or before June 30, 2010, and an individual or business (1) completes a Tax Amnesty Agreement, (2) does not have a liability already covered by a settlement or payment agreement, (3) is not the subject of criminal investigation for violating a Florida revenue law, and (4) has not been convicted of violating a Florida revenue law.

4.         Installment Payments

The Florida program offers an installment plan option.  If a taxpayer cannot pay the tax due before September 30, 2010, it can enter into an agreement with the Florida Department to make installment payments.  To do so, the taxpayer must complete a 2010 Tax Amnesty Agreement, meet with the Florida Department to enter into an Amnesty Stipulated Payment Agreement, and pay a minimum of 12.5% of the amnesty amount due no later than September 30, 2010.  The remaining balance must be paid within seven or fewer monthly installments.  Notably, interest will continue to accrue during the term of the agreement.

5.         Prior Amnesty

A previous Florida tax amnesty program, initiated during 2003, recouped approximately $260 million.  The 2010 version of the program is anticipated to generate up to $100 million of unpaid taxes.

Nevada Amnesty

1.         Benefits Available

For eligible taxes due and payable to the Department prior to July 1, 2010, provides for a complete waiver of penalty and interest.

2.         Taxes Subject To

The Nevada program applies to Sales & Use Tax, Modified Business Tax, outstanding Business License fees payable to the Nevada Department of Revenue (due on or before September 30, 2009), Cigarette and other Tobacco Products Tax, Liquor Tax, Bank Branch Excise Tax, Insurance Premium Tax, Tire Tax, Live Entertainment Tax (non-gaming), Short-term Lessor (Passenger Car), Exhibition Facilities Fees, Property Taxes, and Net Proceeds of Mineral Tax.

3.         Qualification For

Pursuant to the Nevada program, to be eligible an individual or business (1) must complete a Tax Amnesty Application, (2) must not have entered into a compromise or settlement agreement with the Department of Taxation or Nevada Tax Commission regarding the unpaid tax, fee or assessment, and (3) must pay the outstanding tax, in full, by the end of the amnesty period.

4.         Installment Payments

Not Available

5.         Prior Amnesty

A 2008 Nevada tax amnesty program regained $27 million for the state.  The 2010 program is expected to generate an additional $10 million of unpaid taxes.