Ideas

Texas Tax Amnesty Program

Firm Thought Leadership

The Texas Tax Amnesty Program opens today, allowing Texas taxpayers to “get right” on Texas taxes without penalties or interest. All tax periods prior to January 1, 2018 are eligible for the amnesty.

Taxpayers must apply for amnesty within the 60-day window that runs May 1, 2018 through June 29, 2018. The program is available for most delinquent taxpayers, and includes failures to obtain a sales tax (or other) permit, failures to report taxes, or underreported taxes. Certain types of tax aren’t eligible, including: property tax, international fuel tax agreement (IFTA) tax, public utility commission gross receipts tax, and unclaimed property payments. And taxpayers cannot claim amnesty for any tax periods currently scheduled for, or under, audit.

Taxpayers should consult their tax professionals before entering the program, as it contains traps for the unwary. Out-of-state businesses, in particular, should carefully analyze whether registration with Texas could create nexus with Texas. Taxpayers must also consider the effects of statutes of limitations, unforeseen exposure to other tax types, exposure to criminal penalties, and whether a voluntary disclosure agreement is preferable to the amnesty program.

 

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