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IOWA TAX AMNESTY BILL INTRODUCED

February 08, 2007

The legislative language of the tax amnesty proposed in Governor Culver's budget was introduced in the Iowa Senate this week. From the bill explanation:

This bill provides for a state tax amnesty program to be administered by the department of revenue from September 4, 2007, through October 31, 2007. The program covers tax liabilities delinquent as of December 31, 2006, and authorizes a taxpayer, during the period of the tax amnesty program, to pay this tax with one=half of the interest which would ordinarily be due without being subject to further penalty or civil and criminal prosecution. The taxpayer must agree to relinquish all administrative and judicial rights to challenge the imposition of the tax and its amount.

The taxes that are covered under the tax amnesty program are the individual and corporate income taxes; franchise tax; sales and use taxes; hotel and motel tax; local city, county, and school district sales and services taxes; automobile rental tax; equipment tax; petroleum diminution charge; inheritance and estate taxes; motor fuel and special fuel taxes; cigarette and tobacco taxes; and controlled substance tax.

This is likely to pass, as the legislature's desire to have a bit more money right now will trump the interests of sound tax policy. If you have unpaid taxes that Iowa hasn't noticed, you'd be crazy to 'fess up before this bill is signed. If you have been paying your taxes on time, well, you are allowed to feel a bit like a sap now. Meanwhile, Iowa is setting a pattern for tax amnesties every 20 or so years.

You can follow the progress of all 2007 Iowa tax legislation at our 2007 tax legislation tracking page.

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