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Washington Legislature Passes Amnesty Bill in Special Session

Posted Monday, December 13, 2010 by Michael A. Larson

alt textThe Washington Legislature in last Saturday’s emergency special session adopted an amnesty program that will apply to all outstanding penalties and interest as of February 1, 2011 on certain outstanding tax obligations. The amnesty applies only to penalties and interest on B&O tax, public utility tax and both the state and local portions of sales or use tax. The amnesty period begins February 1, 2011, but applies to taxes that were required to have been reported and paid by the taxpayer for periods to February 1, 2011.

To qualify taxpayers must file all outstanding or amended tax returns with respect to which amnesty is requested by no later than April 18, 2011 and make full payment of taxes by May 1, 2011. It also appears that in order to qualify, tax returns for January through April of 2011 must also be filed with the Department by the normal due date; a potential trap for unwary amnesty takers. A yet to be developed application for amnesty must also be filed with the Department by April 18, 2011. Also, taxpayers charged with evasion penalties are not eligible for amnesty nor are sellers who misuse reseller permits or resale certificates.

The biggest drawback to the program is the inability to later challenge payments made under the amnesty program. Taxpayers will need to be careful that they adopt the correct classifications and do not inadvertently overpay their tax obligations. There are a number of other provisions that I will discuss in more detail once this bill becomes law, but this is something all taxpayers with outstanding tax liabilities need to be aware of immediately.

For more information, please contact Ron Bueing at 206-340-2008.

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