New Jersey Enacts Tax Amnesty Bill

The New Jersey legislature enacted legislation that requires the New Jersey Division of Taxation to establish a 90-day state tax amnesty period ending no later than January 15, 2019.

During the amnesty period, a taxpayer who has failed to pay a state tax on or before the day the tax was due may pay the amount of the tax and one-half of the interest due as of November 1, 2018. If the taxpayer pays the required tax and interest, they will not be liable for:

  • the remaining one-half of the balance of interest that is due as of November 1, 2018;
  • late payment penalties;
  • late filing penalties;
  • cost of collection;
  • delinquency penalties; or
  • recovery fees

The taxpayer is, however, required to pay any civil fraud or criminal penalties arising out of an obligation imposed under any state tax law.

The tax amnesty only applies to state tax liabilities for returns due on or after February 1, 2009 and prior to September 1, 2017. If a taxpayer elects to participate in the program, they must make a full payment of the tax owed and interest due to be eligible for amnesty. If the taxpayer has not previously filed a tax return to report the tax due for which the taxpayer is seeking amnesty, the taxpayer must file the required return(s) on or before the last day of the amnesty period. Election to participate in the amnesty shall constitute an express and absolute relinquishment of all administrative and judicial rights of appeal that have not run or otherwise expired as of the payment date. In addition, any payments made under amnesty are not eligible for refund or credit, whether by administrative protest or judicial appeal.

If a taxpayer is found to have liabilities due that should have been paid during the amnesty period, an additional 5% penalty not subject to waiver or abatement will be assessed.

UPDATE: The New Jersey Department of Taxation has announced the dates for its 90-day state tax amnesty period. The tax amnesty period will run from November 15, 2018 until January 15, 2019. For additional details and to file for amnesty, visit the NJ Tax Amnesty webpage.

(Ch. 46 (A.B. 3438), Laws 2018, effective July 1, 2018; 2018 NJ Tax Amnesty Guidelines, updated November 14, 2018).

Posted on November 16, 2018