New Jersey Tax Amnesty Program
July 18, 2018
On July 1, Gov. Phil Murphy signed into law a tax amnesty measure for the State of New Jersey. While no beginning date has yet been set, the amnesty period will last for 90 days and must end by January 15, 2019. Anyone behind on taxes owed for the time period between Feb. 1, 2009, and Sept. 1, 2017, will be eligible to participate, as long as they are not under criminal investigation.
Under the program, all penalties and one-half of the balance of accrued interest that is due as of Nov. 1, 2018 will be forgiven in return for non-refundable payment of the tax and remaining one-half of accrued interest due, and a waiver of the right to appeal any liability paid under amnesty.
The law not only applies to unassessed tax amounts, but also to amounts currently under audit or being contested with the Division of Taxation, either at its Conference Branch or in the New Jersey Tax Court.
All state taxes administered by the Division of Taxation (e.g., gross income, sales and use tax, corporate business tax, motor fuels, etc.) are subject to the amnesty program. The program does not apply to unemployment-type taxes administered by the Department of Labor.
It is important to note that if a taxpayer is eligible for amnesty and fails to take advantage of it, an additional unwaivable 5 percent penalty will be automatically added to the already imposed statutory penalties and interest on any tax liability that would have been subject to the amnesty program.
Although an amnesty payment is nonrefundable, the Division of Taxation retains the right to conduct an audit of any amnesty payment situation, and any additional tax determined by the Division in such a situation would be subject to interest and penalties and, of course, subject to appeal by the taxpayer.
Clients with outstanding or potential tax liabilities, as well as those currently contesting an assessment with the Division of Taxation, should contact Post Polak to determine whether amnesty arrangements can be structured.