As it turns out, amnesty programs aren’t solely found on the federal level. Many states have tax amnesty programs similar to those instated by the federal government. Recently, both Oregon and Oklahoma have enacted new tax amnesty laws aimed at providing tax forgiveness to taxpayers with outstanding tax debts. It’s a welcome change to see states providing options that can properly suit the needs of their residents.
Oklahoma Tax Amnesty Program Changes
Oklahoma’s Tax Commission released new rules regarding the state’s Voluntary Compliance Initiative. Under this new legislation, taxpayers with outstanding tax liabilities can waive all penalties, interest, and collection fees if they pay outstanding tax debts (functionally similar to the federal amnesty Offshore Voluntary Disclosure Program (OVDP)).
The bill, which has been approved by state legislature, lays out an amnesty time frame of September 14th, 2015 to November 13th, 2015 wherein outstanding debts can be paid in exchange for interest/penalty forgiveness.
The specific taxes forgiven under this program are:
1. Mixed beverage tax levied pursuant to Section 576 of Title 37 of the Oklahoma Statutes;
2. Gasoline and diesel tax levied pursuant to Section 500.4 of Title 68 of the Oklahoma Statutes;
3. Gross production and petroleum excise tax levied pursuant to Sections 1001, 1101, and 1102 of Title 68 of the Oklahoma Statutes;
4. Sales tax levied pursuant to Section 1354 of Title 68 of the Oklahoma Statutes;
5. Use tax levied pursuant to Section 1402 of Title 68 of the Oklahoma Statutes;
6. Income tax levied pursuant to Section 2355 of Title 68 of the Oklahoma Statutes;
7. Withholding tax levied pursuant to Section 2385.2 of Title 68 of the Oklahoma Statutes; and
8. Privilege tax levied pursuant to Section 2370 of Title 68 of the Oklahoma Statutes.
Specific details about the taxes can be found in Title 68 on the Oklahoma legislature’s site. This is an amended version of the “emergency” amnesty initiative was last instated by the Oklahoma Tax Commission in 2008.
What does the Oklahoma tax forgiveness program mean?
If you’re an Oklahoman and you have had any back taxes owed for any of the categories listed above, you can waive all accrued collection fees and penalties by filing the delinquent years of state tax debts.
One thing to note: the 2015 Oklahoma Voluntary Compliance Initiative was amended, and if your payment is paid to a debt collection agency as opposed to the Tax Commission itself, the collection agency’s contract fee is not waived.
Keep in mind that this is an emergency amnesty program implemented by the Tax Commission, so there is a limited window in which to take advantage of back tax forgiveness.
Oregon Tax Suspension Updates
As opposed to the Oklahoma forgiveness initiative, the Oregon Department of Revenue has passed a bill suspending collection on unpaid income tax. Under their new program, certain individuals are exempt from state collection on owed taxes.
If you have outstanding debts as of January 1st, 2016, you may be eligible for the suspension of debts:
(2) The department shall offer to suspend collection of an unpaid tax imposed by laws of the State of Oregon that is collected by the department, including any penalty or interest applicable to the tax, if the department determines that the individual liable for the debt:
(a) Has income that does not exceed 200 percent of the federal poverty guidelines based on the individual’s household size and household members;
(b) Has less than $5,000 in assets; and
(c) Has income solely from a source that is exempt from garnishment under ORS chapter
If you meet these requirements, your state income tax debts may be suspended from collection. However, interest will still accrue on these owed debts. In addition, incurring new debt while your current debts are in suspension will effectively boot you from the program — the Department of Revenue can file a lien against your assets and resume collection on the total of your debts.
What does the Oregon Tax Suspension program mean?
If you have an existing income tax liability as of the first day of next year (January 1st, 2016) and are eligible for the suspension program, you have some wiggle room. Voluntary payments towards existing tax debts may still be made to the Department of Revenue.
While the suspension does not forgive the owed taxes or any accrued interest, the suspension may serve to alleviate some pressure — especially if the taxes are ready to fall on your head. If you have a tax issue you need assistance resovling, contact us. We can help.
