By Matt Murphy
STATE HOUSE NEWS SERVICE
STATE HOUSE — House Minority Brad Jones plans to file legislation to offer a two-month corporate tax amnesty program as a mechanism for closing the state’s budget gap, following through on an idea he first floated two weeks ago as an alternative to cutting local aid.
Based on Department of Revenue data, Jones estimates that corporate tax amnesty could bring in $15 million to $20 million in delinquent corporate taxes by allowing a grace period when companies could avoid paying penalties.
“Cities and towns should be the last place state government looks to cut costs,” Jones said in a statement. “If approved by the Legislature, a corporate tax amnesty program will not only yield funds that may otherwise have been forgone, but also ensure that municipalities around the Commonwealth will not be forced to unfairly bear the burden of Governor Patrick’s poor budgeting practices.”
Jones is proposing to make the amnesty program available to businesses organized as corporations, impacting limited liability corporations, S-corporations, financial institutions, and others.
House leaders have yet to determine how they plan to respond to Gov. Deval Patrick’s legislation to close a remaining $57 million shortfall in the current budget, but House Speaker Robert DeLeo has rejected the governor’s idea of trimming local aid by $25.5 million.
Tax collections, the major source of revenue for the state budget, are running $32 million shy of benchmarks four months into the fiscal year, with information about November receipts due out this week.
A two-month tax amnesty program that ran through the end of October pulled in more than $39 million in tax collections from roughly 49,000 residents who took advantage of the window to pay overdue taxes without penalties.
That amnesty program, passed in the state budget over the summer, applied mostly to individual filers and some business taxes, like sales taxes, but not to corporate taxes.
According to Jones, the last corporate tax amnesty program took place in fiscal 2003, and pulled in $61 million in back taxes.