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Focus on State and Local Taxation: Arizona and Pennsylvania Tax Amnesty Programs

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Arizona and Pennsylvania are offering tax amnesty programs to taxpayers. The Arizona program provides amnesty for individual and corporate income taxes for tax years ending before January 1, 2014 and transaction privilege (sales) taxes, including such taxes for program cities, for tax periods ending prior to February 1, 2015.
September 14, 2016

Arizona and Pennsylvania are offering tax amnesty programs to taxpayers.

The Arizona program provides amnesty for individual and corporate income taxes for tax years ending before January 1, 2014 and transaction privilege (sales) taxes, including such taxes for program cities, for tax periods ending prior to February 1, 2015. The state will waive interest and civil penalties for eligible participants applying and filing the applicable returns during the amnesty period of September 1, 2016 through October 31, 2016.

Taxpayers can elect to pay the tax liability in full or take advantage of an installment payment plan. However, there is no limited lookback period and taxpayers that are currently under audit are not eligible. Taxpayers may want to compare the benefits of the amnesty program with the Arizona voluntary disclosure program in order to make an informed decision about participating in either program.

The Pennsylvania program provides amnesty for all taxes administered by the Pennsylvania Department of Revenue and includes waiver of one-half of the applicable interest plus all penalties and fees on delinquent taxes as of December 31, 2015. The program requires taxpayers to file amended or unfiled returns and pay all tax and one-half of the interest in full during the amnesty period of April 21, 2017 through June 19, 2017.

Participation in this amnesty program denies eligibility for the taxpayer to participate in a future tax amnesty program. The Department of Revenue may also collect any penalties and interest waived during the program period within two years if the taxpayer becomes delinquent in payments for consecutive periods.

We would encourage you not to delay your consideration of these programs or other available potential solutions as most of 2015, and all 2016 tax periods are not included in the amnesty programs. Please contact any of our State and Local Tax (SALT) professionals at RubinBrown today if you have any unpaid SALT liabilities, or if these amnesty programs raise concerns or potential uncertainties. We are available to provide you with a detailed consultation regarding the application of these amnesty programs to your business, evaluate viable alternatives, and assist in preparing any required filings.

 

Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.

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