Tax Amnesty for Tacoma Businesses?

There are currently 4,600 businesses in Tacoma with delinquent tax returns, license fees, or penalties on their account. Those delinquent fees and taxes are estimated to total in the neighborhood of $1.4 million. There are another estimated 2,000 businesses that the City of Tacoma knows of operating without licenses, and an unknown number beyond that, which the City doesn't know about, also operating without licenses.

Next week the Tacoma City Council will consider a new program that would offer partial amnesty to those businesses, with the goal of recovering some of the revenue they owe the City.

Businesses participating in the amnesty program would have the opportunity to reconcile what they owe to the City - voluntarily paying back taxes and license fees - in exchange for which the City would waive some or all of the late penalties and interest on those accounts. 

It would work like this:

  • Upon full payment of owed tax and license fees by the business, the City would waive the associated late filing penalties and interest.
  • Upon payment of 50% of civil penalties owed by a business, the City would waive the other 50%, so long as those penalties had not yet been referred to collections.
  • Upon application for new registration and full payment of tax and license fees, the City would only look back 4 years for owed taxes and license fees, and would waive all associated interest and penalties.
  • Businesses still not paying back fees and taxes would be subject to potential collections actions.

Of the estimated $1.4 million owed, the City would only expect to collect a fairly small percentage through the amnesty program - possibly somewhere between 15% and 25%. 

An ordinance adopting the proposal is scheduled for a first reading at next week's council meeting, at which time we'll probably hear more about the numbers and mechanics of the plan. If that ordinance is passed the current proposal is for the amnesty period to open for applications in June, with payments due by the end of July, except for debts of $7,500 or more, which would be eligible for a six month payment option.

How does that sound?


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Comments

Steve Woolworth

That’s a lot of businesses…At the very least, it seems only fair that if some kind of amnesty is going to be extended to the rule avoiders/breakers that those businesses who have been operating in compliance with the regulatory landscape be granted some kind of tax break or recognition.

April 13, 2015 at 7:20 pm / Reply / Quote and reply

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