Missouri's tax amnesty period draws to a close

Saturday, November 1, 2003

JEFFERSON CITY, Mo. -- Missouri is on pace to meet or exceed the legislature's revenue expectations from a three-month incentive period allowing overdue taxpayers to come clean without owing any penalties or interest.

The "tax amnesty" period that began Aug. 1 ended Friday, meaning people had to have either paid or postmarked their checks and tax forms.

The Republican-led legislature established the period -- the second such offer in as many years -- in hopes of encouraging people who otherwise would not pay their taxes to do so, thus generating extra money for a tight state budget.

But while the legislature forecast $10 million in revenue from the offer, Democratic Gov. Bob Holden's administration forecast nothing, presuming that most people inclined to pay up had already done so during last year's effort.

In 2002, the tax amnesty period resulted in about $73 million for state, said Jessica Robinson, a spokeswoman for the Department of Revenue. She said nearly $60 million of that came in or was postmarked in the final week -- an indication that people who procrastinated originally are likely to also procrastinate on finally paying their taxes.

Through mid-Thursday, the Revenue Department had tallied a little more than $9 million from this year's tax amnesty period, Robinson said, so "we're probably going to hit that mark" of $10 million.

Effect on budget unclear

The effect on the budget won't be clear until state employees can analyze the sources of the money, said Renee Godsey, Holden's assistant state budget director. Some of the overdue taxes may have been paid regardless of the amnesty period and so would have already been assumed in revenue projections, she said.

The Revenue Department said the state is owned about $400 million in overdue taxes -- a good part of which it may never collect.

Holding tax amnesty periods in two consecutive years is an unusual tactic. And some state officials have worried it could send the wrong message -- leading procrastinators to think they might also have the penalty-free option in future years.

But legislators have said they won't be making the offer again.

In fact, delinquent taxes eligible for the amnesty period but not paid could be assessed an additional 25 percent collection fee on top of other penalties and interest. And people who pay during the amnesty period could retroactively be charged penalties or interest if they again fail to pay taxes within the next three years.

To be eligible for the amnesty offer, taxes had to be due by Dec. 31, 2002, and could not already be subject to any lawsuits, criminal proceedings or bankruptcy filings.

The amnesty applied to everything from individual and corporate income taxes to sales taxes, tobacco taxes and vehicle taxes.

The tax amnesty provision was part of a larger piece of legislation that contained more than 20 fund-raising provisions for the state.

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