Two elected officials are proposing that the New Jersey offer a three-month tax amnesty program to residents and businesses in order to boost state revenues.
Assemblyman Robert Karabinchak and Assembly Speaker Craig Coughlin proposed the program on Thursday.
In 2014, a two-month tax amnesty program raised about $75 million from more than 26,000 people and businesses who settled outstanding debts with the State of New Jersey. A 2009 tax amnesty program raised $725 million, while a 2002 program raised $277 million. A 1996 tax amnesty program raised $244 million.
During the amnesty period, a taxpayer who has failed to pay any state tax can pay the tax, interest due and costs of collection without the imposition of recovery fees, civil penalties and criminal penalties arising out of the late payment. Amnesty would not be available to a taxpayer who, at the time of payment, is under criminal investigation or charge for any state tax matter. A taxpayer eligible for the amnesty who fails during the amnesty period to pay taxes owed would incur a 5 percent penalty. The penalty would be in addition to other penalties, interest or collection costs authorized by law.
The New Jersey Treasury Department would be able to advertise the tax amnesty program for 30 days. If the measure is approved by the state legislature and governor, the program would start on July 1. The amnesty program would only apply to state tax liabilities for tax returns due between Jan. 1 of 2014 and Dec. 31 of 2016.
“We must consider all alternatives in these difficult budget times, and this is one that has proven to be effective and would be beneficial to everyone. We need to explore all options,” said Karabinchak (D-Middlesex).
“Every potential dollar counts,” said Coughlin (D-Middlesex). “We must consider every possible option to find money, and we know tax amnesty programs work without burdening New Jersey’s families…This is a great opportunity for people and businesses to settle their outstanding debt and for the state to take advantage of a viable option to increase revenue. This has worked well in the past and we have no reason to think it wouldn’t work well again.”