By Senator Melson
ENROLLED, An Act,
To enact the Alabama Tax Delinquency Amnesty Act of 2016; to provide for definitions; to require the Department of Revenue to establish a tax amnesty program as provided for in this Bill; to provide for terms and conditions of the program; to provide for the disposition of the monies collected pursuant to the tax amnesty program; to provide for an effective date; and to provide for related matters.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. This Act shall be known as and may be cited as the "Alabama Tax Delinquency Amnesty Act of 2016".
Section 2. Definitions. As used in this bill, the following terms have the meaning ascribed to them in this Section, except when the context clearly indicates otherwise:
(1) "Commissioner" means the Commissioner of the Department of Revenue.
(2) “Contact” or “Contacted” means previous contact of any kind by the Department or an agent of the Department within five years prior to the initial written request for amnesty. This includes returns filed for the tax types included in the application for tax periods beginning before the look-back period. Contact includes, but is not limited to, with regard to potential liability for the type of tax identified in the amnesty application: receipt of a nexus questionnaire, an audit or notice of audit, payment of tax, registration for tax, registration with the Secretary of State, request for extension of time to file, making a payment of estimated tax, filing a return, and non-compliance issued in response to an application for a certificate of good standing or a certificate of compliance by the taxpayer, or on behalf of the taxpayer.
(3) "Courier" means a messenger other than the United States Postal Service that delivers parcels, packages, and the like, containing returns, reports, and other documents or payments.
(4) "Department" means the Department of Revenue.
(5) “Look-back Period” means the last three full tax years (or 36 months) of tax returns which are delinquent.
(6) "Postmark" means an official mark made by the United States Postal Service on a piece of mail to cancel the stamp and to indicate the place and date of sending.
(7) "Tax period" means any period for which a tax return is required by law to be filed with the department.
(8) "Taxpayer" means any individual or entity subject to any tax imposed by any law of the state of Alabama, payable to the state of Alabama, and collected by the department.
Section 3. (A) The department shall develop and implement a tax amnesty program in accordance with the provisions of this bill. The Commissioner may provide by regulation as necessary for the administration and implementation of this amnesty program. The Commissioner shall publicize the tax amnesty program in order to maximize the public awareness of and participation in the program. The Commissioner may, for purpose of publicizing the tax amnesty program, contract with any advertising agency within or outside this state and use public service announcements, pamphlets, mail notices, and print, television, and radio announcements. Such publications shall include increasing public awareness that the tax amnesty program will provide amnesty for sales and use tax due on internet, mail order, or other purchases made from out-of-state vendors for which Alabama sales or use tax was not charged at the time of purchase. In furthering the collections of amnesty, the Commissioner may procure amnesty program administration services on a fee basis; however, the fee shall not exceed ten percent of the total dollars collected.
(B) The amnesty program shall be effective for a period of at least two months duration in 2016 occurring prior to August 31, 2016. The tax amnesty program shall apply to all taxes administered by the department except for motor fuel taxes, penalties imposed by § 40-29-73, and penalties for failure to submit information reports that are not based on an underpayment of tax.
(C) Notwithstanding the provisions of any other Act or other provisions of law to the contrary, and except as provided in Subsection (B), the following taxes are eligible for amnesty:
(1) Taxes due prior to January 1, 2015; or
(2) Taxes for taxable periods that began before January 1, 2015.
(D) Participation in the amnesty program shall be conditioned upon the agreement of the taxpayer that the right to protest or initiate an administrative or judicial proceeding is barred. The agreement shall only apply to the specific tax and the tax period for which amnesty is granted.
(E) Amnesty will be granted only for eligible taxes to eligible taxpayers who apply for amnesty during the amnesty period on forms prescribed by the Commissioner and who pay all of the tax, all fees and costs, if applicable, and any interest due upon filing the amnesty application. A standard look-back period, as defined in this Act, will apply for all tax types eligible for amnesty. If the taxpayer has collected any tax without remitting such tax to the Department, the look-back period will be extended to include all periods, back to the point of collection. The Commissioner shall reserve the right to require taxpayers to file tax returns with the amnesty application. Notwithstanding the provisions of any other Act or other provisions of law to the contrary, if the amnesty application is approved during the amnesty period the Commissioner shall waive one-half of the interest and all of the penalties associated with the tax periods for which amnesty is applied. An amnesty payment or application submitted in a properly addressed envelope with sufficient postage delivered by the United States Postal Service is deemed paid or received on the date it is postmarked. An amnesty payment or application delivered by courier or taxpayer is deemed paid or received on the date it is delivered to the department's headquarters or a regional office. No installment agreements will be entered into for tax periods that are approved for amnesty.
(F) Ineligible taxpayers. Amnesty shall not be granted to taxpayers who have been contacted by the department, who are parties to any criminal investigation or criminal litigations in any court of the United States or the state of Alabama pending on the effective date of this Act for nonpayment, delinquency, or fraud in relation to any state tax imposed by a law of the state of Alabama and administered by the department. Further, a taxpayer who delivers or discloses any false or fraudulent application, document, return, or other statement to the department in connection with an amnesty application shall be ineligible for amnesty and shall be subject of the fraud penalty under Section 40-2A-11(d), Code of Alabama 1975, or a penalty of ten thousand dollars, whichever is greater.
(1) Amnesty applications shall include a written waiver of all rights, restrictions, and delays for assessing, collecting, or protesting taxes and interest due as set forth in Title 40, Chapter 2A and Chapter 2B of the Code of Alabama, 1975. The filing of such applications shall make the tax, interest, and penalty immediately due and payable; subject to the notice and due process procedures provided for by law; ineligible for refund, credit, or claim against the state; and ineligible for redetermination; however, a taxpayer shall be eligible for a refund or credit if the overpayment arises after the amnesty application is submitted and is attributable to a properly claimed Alabama net operating loss or attributable to an adjustment made by the Internal Revenue Service to the taxpayer's federal income tax, and the taxpayer provides notice of the adjustment to the Commissioner within sixty days of receipt of the adjustment from the Internal Revenue Service. A taxpayer who files an application for amnesty retains all administrative and judicial rights of appeal with respect to any additional tax assessed by the department.
(G) No interest shall be paid on refunds for those amounts previously collected by the department from the taxpayer for a tax period for which amnesty is granted.
(H) Post amnesty collection penalty. If, following the termination of the tax amnesty period, the Commissioner issues a deficiency assessment for a period for which amnesty was taken, the Commissioner shall have the authority to impose penalties and institute civil proceedings or criminal proceedings as authorized by law only with respect to the difference between the amount shown on the amnesty application and the correct amount of tax due. The Commissioner may by regulation impose after the expiration of the tax amnesty period a cost of collection penalty not to exceed twenty percent of any additional deficiency assessed for any taxable period for which amnesty was taken. This penalty shall be in addition to all other applicable penalties, fees, or costs. The Commissioner shall have the right to waive any or all of the collection penalty when it is demonstrated that any of the deficiency of the taxpayer was not due to negligence, intentional disregard of administrative rules and regulations, or fraud. The imposition of penalties or civil proceedings or criminal proceedings shall not invalidate the amnesty that was previously granted. No penalty shall be imposed if the deficiency results from an adjustment made by the Internal Revenue Service to the taxpayer's federal income tax and the taxpayer provides written notice of the adjustment to the Commissioner within sixty days of receipt of the adjustment from the Internal Revenue Service or if the taxpayer's application for amnesty was based on a proposed assessment or notice of assessment.
(I) For taxable periods beginning on or after January 1, 2016, and before December 31, 2023, taxpayers that participate in the amnesty and later fail to comply with anypayment or filing provision administered by the Commissioner shall be subject to the negligence penalty under Section 40-2A-11(c), Code of Alabama 1975, or a penalty of one hundred dollars, whichever is greater.
Section 4. (A) The Commissioner shall also retain an amount not to exceed two hundred fifty thousand dollars for advertising expenses from monies collected from taxes paid pursuant to this Act. Such amount is hereby appropriated to the Department and shall be in addition to any and all other funds heretofore or hereafter appropriated, for the fiscal year beginning October 1, 2015.
(B) After satisfaction of the requirements of Subsection A of this Section, all remaining monies collected pursuant to this bill shall be paid into the state treasury and placed in the appropriate state funds for the specific tax collected pursuant to current law.
Section 5. This Act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.