On Nov. 15, 2018, the New Jersey Division of Taxation debuted a new website for the state’s tax amnesty program enacted earlier this summer. The program will run from Nov. 15, 2018, through Jan. 15, 2019, offering a limited opportunity for taxpayers to file late returns and pay outstanding taxes owed to the state. Brief highlights of the program are summarized below.
Benefits of amnesty for eligible taxpayers:
- Complete waiver of penalties and fees
- Waiver of one-half of the balance of interest due as of Nov. 1, 2018
Eligible periods and taxes:
- Eligible periods include tax liabilities for returns due on or after Feb. 1, 2009 through Sept. 1, 2017
- Taxes eligible for amnesty are those administered by the division, including sales and use tax and corporation business tax
- Ineligible taxes include local property taxes, fees assessed by the New Jersey Division of Revenue, federal liabilities, motor carriers road use taxes and payroll taxes owed to the New Jersey Department of Labor
Filing for amnesty:
Amnesty requests must be filed electronically. Most taxpayers will receive a notice by mail on or about the first day of the program instructing on how to apply. Taxpayers that did not receive a notice may still apply online for the program. An amnesty waiver statement must also be signed acknowledging that the taxpayer has waived their right to appeal for those taxes.
Takeaways
New Jersey taxpayers with outstanding liabilities should consider whether the amnesty program is appropriate for coming into compliance with the state. New Jersey will impose a 5 percent amnesty penalty on all amnesty-eligible tax balances remaining after the amnesty period ends. The division has noted that this penalty cannot be waived or abated.
Taxpayers that disagree with the amnesty notice may be able to reconcile their account before filing for amnesty. Taxpayers with existing appeals may also want to consider pursuing amnesty, however, liabilities submitted for amnesty are not eligible for appeal.
Businesses considering applying for New Jersey’s amnesty program or who would like to discuss the benefits and risks of the programs should contact their state tax adviser.
