On July 1st, the governor of New Jersey signed into law a tax amnesty measure that will allow eligible New Jersey taxpayers to report and remit past due taxes with reduced interest and no late penalties. The 2018 New Jersey Amnesty Program will cover state tax liabilities for tax returns due on or after February 1, 2009 through September 1, 2017 and will apply to all state taxes administered by the New Jersey Department of Treasury’s Division of Taxation, including state sales and use taxes.
While the Division of Taxation has not yet announced the start date of the 2018 Amnesty Program, as per the legislation, the program shall not exceed 90 days and is set to end no later than January 15, 2019. That said, the Division’s website states that the Amnesty Program will not begin until after November 1, 2018.
As stated above, the benefits of the 2018 Amnesty Program include a waiver of all late penalties that would otherwise be owed and a waiver of half of the interest owed on unpaid amounts. In return, an amnesty participate agrees to:
- pay half of the interest owed on subject taxes as of November 1, 2018 and all unpaid taxes owed during the amnesty period prior to the close of the Amnesty Program;
- file any tax returns that the taxpayer failed to complete and remit during the amnesty period; and
- waive all rights to appeal or seek a refund or credit of amounts paid pursuant to the Amnesty Program.
All taxpayers with unpaid taxes accruing during the eligible period are eligible to participate in the program, with the exception of taxpayers under criminal investigation for a state tax matter. Notably, taxpayers could still be eligible to participate in the Amnesty Program even if they are currently under audit with the Division of Taxation. Further, eligible taxpayers who fail to take advantage of the 2018 Amnesty Program face an additional 5% non-abatable penalty on any eligible debts not resolved during the Amnesty Period.
We encourage entities with unpaid New Jersey taxes to contact legal or accounting professionals in order to take advantage of the 2018 Amnesty Program and avoid the potential assessment of additional penalties.
If you woud like additional information, please contact Allison Rule at adr@CommLawgroup.com, or 703-714-1312.