If your business has gotten behind on its sales taxes, it can lead to penalties, interest, and even criminal sanctions. Eventually, in many states, nonpayment of collected sales tax can ultimately result in liens and seizures of personal assets like your home or car. Therefore, sales tax compliance and payment is critically important. Luckily, a tax amnesty program is a great chance for businesses with unpaid taxes to get a discount. If you are in Connecticut, you might want to know more about the recently passed law that creates a sales tax amnesty period from November 1, 2021 through January 31, 2022.
This post gives you comprehensive information on Connecticut's tax amnesty period.
Connecticut Tax Amnesty Period
Connecticut's budget bill signed on June 23, 2021, mandates the Connecticut Commissioner of Revenue Services to institute a tax amnesty program for 90 days starting November 1, 2021 and ending on January 31, 2022. After that, the commissioner should release information regarding the procedures for requesting participation in the program; thus, taxpayers wishing to participate in this program should remain alert for further updates.
What Is a Tax Amnesty Period?
A tax amnesty program is a period provided by the state for people who have outstanding tax debts to pay partially or fully, often with some waiver on penalties and interest. It is not a standing offer but a one-time deal with a specified period.
For example, Connecticut's tax amnesty period runs between November 1, 2021, and January 31, 2022. The State Department of Revenue has the mandate to specify the kind of taxes that qualify for amnesty. Typically this includes business sales taxes, corporate taxes, and personal income tax.
According to Connecticut's budget bill, the amnesty program is open to taxes due after November 2012. This applies to taxes not disclosed to the state or paid in the past. Pursuant to the amnesty, Connecticut's Department of Revenue puts a waiver of penalties and a 75% reduction in interest due.
Why the Government Offers a Tax Amnesty
Tax amnesty programs allow the government to collect revenue that it would never have collected. The reason being, taxpayers participating in a tax amnesty program pay the tax arrears known to the Department of Revenue in addition to taxes that the government does not know about and hasn't penalized.
The tax official perceives tax amnesty as a smart move to collect money that a taxpayer would otherwise never disclose. Since the government lacks the resources to audit or investigate every delinquent taxpayer, it places a tax amnesty program as an open invitation for taxpayers to settle their tax debts.
Participation
Connecticut’s sales tax amnesty period is a great opportunity to get past tax liabilities current. Especially after COVID, many businesses fell behind and governmental revenue is dropping. Taxpayers can get current and avoid penalties and interest, while the government can generate otherwise uncollectible revenue. Therefore, participating in the tax amnesty program once announced is a great way to clear your past sales tax liabilities.
Get Professional Sales Tax Assistance!
Connecticut's tax amnesty period is fast approaching. Businesses should prepare to settle their long owed debts with the state government. However, several tax issues that require professional assistance are likely to arise.
At Sales Tax Helper, we offer services such as sales tax voluntary disclosures, sales tax audit defense, assessment challenges and appeals, sales tax litigation, and consulting. We have an experienced team consisting of former auditors, seasoned sales tax advisors, and even lawyers who help your business get the best outcome in your audit or protest. Reach out to us for support.