Tag Archive for States

States Offer Amnesty in Attempt to Collect Tax

TaxConnections Blogger John Dundon posts about accumulated adjustment accountsEach year, many states announce amnesty programs in an effort to incentivize taxpayers to pay state tax. Most programs, in one form or another, offer partial or full interest and penalty abatement if taxpayers pay back taxes owed. While the programs seem like a win for states in theory, as a state and local tax attorney, I can promise that such programs lead to problems. Auditors in the various states are told to close down improperly completed audits in an effort to get taxpayers in the amnesty program. This, in turn, leads to poorly conducted audits that must be protested and litigated. In short, state and local tax professionals in those states should be licking their chops for the bombardment of work that will likely ensue.

The most recent states to implement a version of an amnesty program are Arkansas, Connecticut, and Louisiana.

Arkansas’ amnesty program applies to franchise taxes and runs from September 1st through December 31st, 2013. In order to participate, taxpayers must submit all reports and forms and pay the computed tax to the state. If a taxpayer meets the requirement of the deal, then Arkansas will waive all interest and penalties for delinquent taxpayers.

Similarly, in Louisiana, a Tax Amnesty program went into effect on September 23rd, 2013. The Louisiana amnesty program is broader than Louisiana in that it covers most state and local taxes. Taxpayers only have until Read more

States Still Seeking Sales Tax

TaxConnections Picture - Tax DollarsStates’ efforts to turn remote vendors into sales tax collectors are varied, ever changing, and often problematic.

For decades, states that impose sales and use tax have sought ways to get out-of-state (remote) vendors to collect sales tax rather than rely on consumers to self-assess use tax. A major obstacle to this goal is a 1992 Supreme Court decision (Quill Corp. v. North Dakota, 504 U.S. 298 (1992)), in which the Court held that a state may impose sales tax collection obligations on a vendor only if the vendor has a physical presence in the state.

Efforts by states to overcome the Quill decision include:

• Convincing Congress to exercise its Commerce Clause authority and overturn the Quill decision, while perhaps exempting small vendors. Legislation has been introduced many times since 1992. Most recently, Read more