Washington state’s 90-day amnesty program for businesses with delinquent taxes is underway, but it’s not likely to be feasible for most small businesses. The plan to collect overdue taxes would waive penalties and interest.
The tax amnesty program is a great opportunity for small businesses to file and pay past due taxes without penalties. The major drawback, which will limit the usefulness of this program, is that all taxes due must be paid in full by April 30, 2011.
Most small businesses do not have the ability to make the full payment of past due taxes (hence the reason the returns were not filed in the first place) and lending institutions will not approve loans for this purpose.
To be effective, this program should provide that all returns must be filed and then allow an installment payment program, with interest, for amounts due and owing.
Indeed, some 80 percent of the state’s 50,000 delinquent companies will not participate according to estimates by the state’s Department of Revenue. The agency believes it will generate $24.4 million for state coffers and $3.9 million in revenue for local taxing authorities.