Oklahoma has enacted legislation authorizing and directing the Oklahoma Tax Commission to administer a tax amnesty program, termed a "voluntary compliance initiative," from September 14 to November 13, 2015.1 The program applies to most taxes administered by the Tax Commission. If the taxpayer complies with the amnesty program requirements, the Tax Commission will waive penalties, interest and other collection fees or costs due on eligible taxes that were due and payable for any tax period ending before January 1, 2015.

Operation of Program

This program is similar to a program that the Oklahoma Tax Commission conducted during 2008. The following are eligible taxes under the program:

  • Corporate and personal income tax;
  • Sales and use tax;
  • Withholding tax;
  • Gasoline and diesel tax;
  • Gross production and petroleum excise tax;
  • Mixed beverage tax; and
  • Privilege tax for banking associations and credit unions.2

A taxpayer is entitled to receive the benefits of the program if the taxpayer voluntarily files delinquent tax returns and pays the taxes due during the program period.3 Also, a taxpayer may enter into a written payment program agreement with the Tax Commission for full payment of the unpaid taxes. Upon payment of the eligible taxes under the program, the Tax Commission will abate and not seek to collect any interest, penalties, collection fees, or costs that would otherwise be applicable and release any liens imposed.4 However, if the delinquent taxes are remitted to a debt collection agency, the contract fee will not be waived.

Commentary

Oklahoma is the latest state to enact a tax amnesty program. In recent months, amnesty programs also have been enacted by Arizona, Indiana, Maryland, Massachusetts and Missouri. Taxpayers who believe they owe any of the Oklahoma taxes listed above should consider participating in the amnesty program as a means to avoid interest, penalties and costs or fees. The Tax Commission is expected to provide guidance to taxpayers concerning the administration of the program.5 Although this program is based on the program from 2008, the current program does not provide for a special penalty for failing to pay under the amnesty program.6 Note that the program is projected to produce state revenue of $35 million.7

Footnotes

1 H.B. 2236, Laws 2015. Note that the statute expressly provides that the program is "subject to the availability of funds." OKLA. STAT. tit. 68, § 216.3.A. This language seems unclear and does not reference specific funds. However, the statute also provides that "[t]he Tax Commission is authorized to expend necessary available funds, including contracting with third parties, to publicly advertise, assist in the collection of eligible taxes, and administer the [program]." OKLA. STAT. tit. 68, § 216.3.E. Presumably, any funding issues will be resolved before the program begins.

2 OKLA. STAT. tit. 68, § 216.3.C. Unlike the 2008 program, franchise taxes are not included.

3 OKLA. STAT. tit. 68, § 216.3.A.

4 OKLA. STAT. tit. 68, § 216.3.B.

5 The Tax Commission is directed to promulgate rules detailing the terms and other conditions of the program. OKLA. STAT. tit. 68, § 216.3.D.

6 Specifically, the prior tax amnesty statute provided that if any eligible tax, or any part of a tax, was not paid before the end of the period or in conformity with a written payment agreement entered into during the program between the Tax Commission and the taxpayer for payment of the eligible taxes, a penalty equal to the amount of delinquent penalty imposed by the applicable section for nonpayment of the tax was added to the amount owed, collected and paid. Former OKLA. STAT. tit. 68, § 216.3.D.

7 Bill Summary for H.B. 2236, Oklahoma House of Representatives, May 11, 2015.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.