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Owe state taxes? Check out amnesties

Attention delinquent Massachusetts taxpayers. You have just a few more hours to take advantage of your state's tax amnesty period.

Since March 1, the Bay State has been giving its residents who haven't paid their state tax bills a chance to come clean and suffer minimal consequences

That tax pass ends, however, at close of business today, April 30.

This year's Massachusetts tax amnesty applies to individuals with 1) existing personal income tax liabilities, 2) existing personal use tax liabilities, or 3) existing cigarette excise liabilities (pertaining to purchases for individual consumption).

Eligible taxpayers need to get a "Tax Amnesty Notice" from the Massachusetts Department of Revenue. Only those folks, says the state, are eligible to participate in the rapidly winding down 2009 tax amnesty.

And if you are eligible but don't make a payment by today, Massachusetts' tax officials will continue billing and collection action on all of your unpaid liabilities.

Problems with tax amnesties: This is the third tax amnesty Massachusetts has held since 2002. I'm presuming the programs are prompted by a continuing number of "Taxachusetts" residents who resist paying what they owe.

But the state could be bringing the problem on itself.

The Tax Foundation says that's one of the problems with frequent tax amnesties. People simply decide to just not pay, figuring they can be let off the hook for penalties and interest when another tax amnesty rolls around. In essence, states are helping perpetuate bad tax-paying (or non-tax-paying) habits.

And that also makes the state's taxpayers who pony up on time a tad angry.

I totally understand their irritation. It is unfair for those of us, at the state and federal levels, who conscientiously pay our taxes to carry the dead weight of tax delinquents.

Why they persist: But expect states to keep holding tax amnesties.

They are easy to administer, simply enticing people who otherwise might not pay until actually tracked down to come forward and at least hand over their overdue tax amounts.

And the states seem to figure that the uncollected penalties and interest they give up in amnesties are a price worth paying to save them from sending out tax collectors.

As states struggle to make ends meet in this economy, they are looking for any way, especially relatively easy ones, to get at least some money into their treasuries. So expect amnesties to continue.

Other state amnesty programs: I discovered today's deadline for the Massachusetts 2009 tax amnesty when I was doing research for and writing a story on the subject. I'm not sure when it will be published, but when it is, I'll come back here and put in the link.

Update May 6, 2009:
As promised, more on tax amnesties
in my story Some states offering tax amnesty.

I also ran across a few more tax amnesties, detailed in the table below, that are underway or soon will be. Check them out and let me know if I overlooked your state.

Alabama Feb. 1 -- May 15
Arizona May 1 -- June 1
Connecticut May 1 -- June 25
New Jersey May 4 -- June 15
Virginia Not yet set, but it must be concluded by June 30, 2010
Wisconsin Retailers who have not remitted sales tax collections have until Oct. 1, 2010, to register

If your state isn't on this list, you still might be in luck. Tax amnesties for this year also are being considered by legislatures in Hawaii, Louisiana, Maryland, Michigan, New Mexico, Oregon and Vermont.

And many states also offer ongoing voluntary compliance programs. Check with your state's tax department for details.


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