Scofflaws. Shrewd businessmen. Strapped-for-cash households.
Thousands of Louisiana taxpayers fall into one of those categories, and legislators hope an amnesty program will inspire them to settle their tax disputes with the state.
“We need to produce $200 million for the budget,” said state Rep. Joel Robideaux, chairman of House Ways and Means committee.
Health care funding will have to be cut in the state spending plan if legislators missed the mark on how much money will materialize from the program.
Amnesty would reduce taxpayers’ costs for resolving their disputes and paying their tax bills. Taxpayers involved in criminal investigations are ineligible.
The state budget year started July 1, and the Jindal administration already is organizing the workforce needed for the program.
Legislation signed into law by Gov. Bobby Jindal earlier this year offers taxpayers three payment windows and a sliding scale of incentives.
The Jindal administration expects to announce this week the dates for the first amnesty period.
A more robust rollout, which should include details on how the program will work, is expected later in the year.
The state Department of Revenue declined Friday to estimate how many taxpayers are eligible for the program and how many dollars are involved. The department’s spokesman, Douglas Baker, said the agency still is double checking its research in preparation for announcing the dates.
However, earlier this year, the Legislative Fiscal Office estimated more than 300,000 taxpayers owing $700 million will be eligible. The office, which analyzes the fiscal impact of legislation, expected roughly 30,000 taxpayers to participate.
The amnesty legislation makes a big push for taxpayers to participate this year rather than waiting for the 2014 or 2015 windows. The state operating budget relies on $200 million materializing for health care bills that must be paid over the next 12 months.
The amnesty legislation staggers the program over three years:
- For two months this year, half the interest and all penalties will be waived.
- For one month in 2014, 15 percent of penalties will be waived.
- For one month in 2015, 10 percent of penalties will be waived.
Jindal considered an amnesty program earlier this year while trying to reconcile the numbers on a proposal to eliminate the state’s income taxes. The idea seemed to die when the governor abandoned his tax plan on the first day of session in April.
Legislators later resurrected the amnesty program after they reworked portions of the governor’s $25.4 billion state operating budget for the fiscal year that started in July. Amnesty program proceeds replaced some of the governor’s ideas for balancing the budget.
Louisiana last held an amnesty program in 2010. The money generated helped state government avoid public hospital closures and massive layoffs on college campuses.
The Legislative Fiscal Office created a little uneasiness this year by estimating the upcoming amnesty program will produce $150 million to $175 million, millions short of the $200 million inserted into the budget.
“The impact of this bill is highly uncertain,” the office warned.
However, the office made the same estimate about the 2010 program that generated $482.7 million.
Robideaux, R-Lafayette, said he thought it fair and conservative to bank on collecting 21 percent of the dollars eligible for the program.
As for why so much is eligible for collection, Robideaux, a certified public accountant, said there are several reasons.
“There’s scenarios where people aren’t really aware, in tune or don’t care about paying the taxes ... Then there’s a large portion of (the money owed) that’s corporations that use that as their strategy,” he said.
Robideaux said the big dollar tax bills stem from corporations who tie the money up in legal disputes and then angle for a reduced payment.
The smaller segment of unpaid taxes belongs to people who are struggling and just cannot afford to settle, he said.