Amnesty may carry a negative connotation when it comes to immigration, but it turns positive when applied to taxes. At least some people think so.
Beginning Thursday, the state of Florida will waive penalties on back taxes owed by businesses and individuals. During a three-month window closing Sept. 30, all applicable interest fees also will be cut in half.
A similar tax-amnesty program recouped $260 million in previously lost revenue in 2003. This year's version, coming in tighter economic times, is projected to generate up to $100 million.
Dominic Calabro, president of Florida TaxWatch, lobbied for the program as a "carrot" to entice scofflaws to pay up.
"But there's a stick, too. That stick is the addition of more tax auditors," Calabro said.
State Rep. Ellyn Bogdanoff, R-Fort Lauderdale, authored the measure and patterned it after the 2003 version. She called it "a good way to raise revenue without raising taxes."
The state Department of Revenue will accept amnesty applications from individuals and businesses who are not:
- under criminal investigation, indictment, information, or prosecution regarding a Florida revenue law;
- under a pretrial intervention or diversion program, probation, community control, or in a work camp, jail, state prison, or another correctional system regarding a Florida revenue law.
Bob Sanchez, policy director for the James Madison Institute, a conservative think tank based in Tallahassee, said the need for periodic tax amnesties is partly due to the tax code itself.
"Taxpayers compliance generally improves when the tax code is kept simple and the rates are kept low. Indeed, the formula of 'broad base, low rates' generally results in a net gain of revenue for the government because reporting is simpler, and there is less incentive for tax avoidance.
"Unfortunately, the federal and state tax codes are often burdened with scores of politically inspired complications," he said.
Sanchez added, "Occasional tax amnesties are a helpful method of dealing with the underpayment, recouping lost revenue that is rightly owed to the government but has not been collected either because of deliberate avoidance or mere oversight and confusion."
Yet Sanchez also cautioned:
"Such amnesties, with their reductions in penalties and interest charges, have not been shown to provide an incentive for tax avoidance any more than 'amnesties' for overdue library books encourage forgetful borrowers to hang on to the latest best-seller."
Jose Gonzalez, vice president for government affairs at Associated Industries of Florida, sounded a similar concern.
"While these types of proposals are good for both employers and the state in the short-term and during economic downturns, we must be careful not to rely too much on their use since it may send the wrong message to taxpayers.
"AIF was not opposed to this legislation and we hope that the state is successful, but we recognize that the best policy is always to enforce the current laws and collections, and not allow bad actors to think that they dont have to pay their taxes in anticipation of future tax-amnesty periods. Encouraging bad behavior only makes it tougher for those employers who play by the rule," Gonzalez said.
Individuals or businesses wanting to apply for tax amnesty can view instructions and download forms at the state Department of Revenue's amnesty Web page.
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Contact Kenric Ward at kward@sunshinestatenews.com or at (772) 801-5341.
