Assembly Approves Karabinchak & Coughlin Bill to Establish Tax Amnesty Period

Would Apply to Tax Returns Due on or After February 1, 2009
      

(TRENTON) – Legislation sponsored by Assemblyman Robert Karabinchak and Assembly Speaker Craig Coughlin to establish a state tax amnesty period, that would end no later than January 15, 2019, for tax returns due on or after February 1, 2009 was approved Sunday by the full Assembly.

“This bill will help eligible tax payers who, for a variety of reasons, are in arrears with their state taxes,” said Karabinchak (D-Middlesex). “A job loss, health crisis or even a family emergency can change a person’s financial picture. This bill would provide relief and a means to satisfy such outstanding debt.”

“It’s very easy to pass judgment on someone who has fallen behind on their taxes,” said Coughlin (D-Middlesex). “Yet the reality is, each person’s financial situation is unique. Life happens, and finances can change for the worse very quickly.”

Under the bill (A-3438), the Director of Taxation would establish an amnesty period not to exceed 90 days in duration during which a taxpayer who owes back taxes and not under criminal investigation can participate.  The tax amnesty period is to end no later than January 15, 2019.

During the amnesty period, a taxpayer who has not paid a state tax can pay the tax and one-half of the balance of interest that was due as of November 1, 2018, without any recovery fees, civil penalties and criminal penalties arising out of the late payment. A taxpayer who, at the time of payment, is under criminal investigation or charge for any State tax matter is not eligible for the amnesty.

Amnesty covers all state taxes payable to the New Jersey Division of Taxation including the Corporation Business Tax, Sales and Use Tax, and Gross Income Tax.  Taxes not administered and collected by the division, such as local property taxes, realty transfer fees, and federal liabilities are not covered.

If a taxpayer eligible for the amnesty fails to pay the taxes owed during the amnesty period, that taxpayer would be subject to a five percent penalty which may not be waived or abated.  The five percent penalty would be in addition to all other penalties, interest, or collection costs authorized by law.

The bill was approved by the Assembly 56-15. It was released by the Assembly Budget Committee June 21.