Virginia soon will hold a 60-day tax amnesty period in hopes of raising an estimated $41 million in much-needed revenue.
State Tax Commissioner Janie E. Bowen presented the “Get square on back taxes” plan in a slideshow to the Virginia House Appropriations Committee.
The program mirrors a similar tax amnesty being held in Maryland. For two months, each state is letting delinquent taxpayers pay their taxes without penalty and with a 50 percent reduction in interest owed.
Bowen would not announce when the amnesty will begin to discourage taxpayers from delaying to pay their taxes. The governor’s office will announce the timetable, said Joel Davison, spokesman for the Department of Taxation.
Outstanding liabilities and unfiled returns at least 90 days old will be eligible for amnesty. Delinquent taxpayers who do not pay during the amnesty will be penalized an additional 20 percent, punishing taxpayers who still refuse to pay.
Gov. Tim Kaine is throwing his support behind the program, said spokesman Gordon Hickey.
“Amnesty programs have proven to be effective in the past,” Hickey said, “and we’re looking into some options for offering another amnesty in the near future.
He cited the two previous amnesty programs in Virginia; one in 1991, which raised $32 million, and another in 2003, which raised $98.3 million.
Both programs brought in money that may not have been collected otherwise, Hickey said.
Virginia, as well as Maryland and the District of Columbia, has been struggling with plunging revenues. Kaine announced major cuts several weeks ago to stem a $1.35 billion shortfall in the state budget and is expected to face a large gap next year as well.
Maryland’s tax amnesty has been in effect since Sept. 1 and runs through Oct. 31. The state was processing 642 applications as of Sept. 19, said Joseph Shapiro, a spokesman for the state comptroller.
Maryland has received $1.2 million in late payments, and Shapiro estimates that the amnesty will earn between $5 million and $10 million.
The District of Columbia also is planning a tax amnesty in the fiscal year that starts Oct. 1. Officials anticipate they will collect $20 million from the program.
