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Amnesty Programs Offer Trucking Companies Relief from State Tax Penalties
If your trucking company’s vehicles travel across state lines for deliveries or pick-ups, or if you provide brokerage services to customers in another state, it’s quite possible you have “nexus” with that state (or states) which saddles you with additional tax-filing obligations.
Surprised? You’re not alone. Nexus is considered a substantial connection with a state that allows it to tax you, and each state has its own nexus guidelines. Many trucking companies don’t even know of these rules and their attendant tax requirements until a state’s regulators inform them they are out of compliance and in arrears.
If your company is among those who have been blissfully unaware until now, you may have recourse with an amnesty program.
Amnesty often includes a waiver of penalties and interest
States are becoming more aggressive in identifying companies outside of their borders that have not fulfilled their tax compliance requirements. But in the largesse that often accompanies a regulatory crackdown, many of them have also extended relief in the form of amnesty programs. It’s a chance to catch up on your obligations before the regulators catch up with you — and before each state’s fall program deadline.
The most common (and most attractive) benefit of entering into an amnesty agreement is a waiver of penalties and interest. Before you apply, you should be aware of several program caveats:
- More often than not, states deny amnesty to taxpayers who have previously entered other amnesty programs or been contacted by the state.
- States generally waive all or a portion of penalties and interest (but not tax) for covered years.
- The submission of an amnesty application may constitute a waiver of your right to an abatement or appeal of any amounts paid under the program.
- Returns and amounts owed under the program are normally due before the end of the amnesty period unless an installment agreement is allowed.
- States may propose significant penalties for companies that are eligible but do not participate.
- Amnesty programs may require a company to resolve compliance issues for all tax types (income/franchise, sales/use, withholding, etc.) versus a single type of tax.
- States may have other programs available, such as a voluntary disclosure agreement (VDA) program, which could be more beneficial than an amnesty program. For example, VDA programs typically limit the number of prior years for which taxes are required, while amnesty programs may not. Companies with unpaid liabilities should carefully evaluate which program is more beneficial based on their specific circumstances.
State amnesty programs for fall 2015
|Arizona||September 1, – October 31, 2015||Abate or waive penalties and interest for unpaid tax liabilities|
|Indiana||September 15 – November 16, 2015||Waive penalties and interest|
|Kansas||September 1 – October 15, 2015||Amnesty from all penalties and interest on eligible unpaid taxes or eligible taxes due and owed for the tax years covered by the program|
|Louisiana||Fall 2015 – dates to be announced||Details to be announced|
|Maryland||September 1 – October 30, 2015||Abate civil penalties and 50 percent of interest due|
|Missouri||September 1 – November 30, 2015||Waive all interest, additions to tax, and penalties|
|Oklahoma||September 14 – November 13, 2015||Waive all penalties, interest, and other collection fees|
|South Carolina||Pending creation of an authorized program||Waive all or part of penalty and interest|
How we can help
CLA can help determine if your trucking company has nexus risk in one or more states, evaluate which state programs make sense for your company, and work with you to create a state and local tax risk mitigation plan.