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Editorial: State's budget tied to success of tax amnesty program

Last Modified: Tuesday, July 23, 2013 4:59 PM

Buoyed by surprising success three years ago, Louisiana’s state government plans another tax amnesty program.

The idea is to help residents and corporations clear up any unpaid taxes while producing necessary revenue for the current fiscal year’s budget.

Gov. Bobby Jindal first called for the amnesty program as part of his plan to do away with personal and corporate income taxes and replace them with a higher state sales tax. When lawmakers pronounced that notion dead on arrival at the opening of this year’s regular legislative session, Jindal’s amnesty program evaporated.

But with the state cash-strapped, lawmakers cobbled together an amnesty plan they hope will produce $200 million for this year’s budget.

The plan is front-loaded with incentives to lure those who owe the state taxes to pay sooner rather than later.

According to the amnesty legislation, for a two-month period this fiscal year, all penalties and half the interest owed on a state tax bill will be waived. Next year for one month, only 15 percent of the penalties will be waived. And for one month during the 2015-2016 fiscal year, only 10 percent of the penalties will be waived.

In 2010, a similar tax amnesty program produced more than $482 million in revenue for the state.

The state Department of Revenue declined last week to estimate what it is owed, but earlier this year the Legislative Fiscal Office estimated the bill at $700 million. It also predicted that about 10 percent of the 300,000 debtors, the vast majority of which are corporations and companies, will participate.

State Rep. Joel Robideaux, R-Lafayette, chairman of the House Ways and Means committee, said only a small percentage of those that owe the state are individual taxpayers.

He said the bulk of the money is owed by corporations that dispute their tax bill and pursue legal means in hopes of a settlement to ease their payment.

The hitch here is that the Legislative Fiscal Office has estimated that this year’s amnesty program will net the state between $150 million and $175 million. With lawmakers’ optimistic view of $200 million being plugged into the current budget, any shortfall would likely impact the usual victims, state health care and higher education.

The stakes then are high, and so is the responsibility of the state to ensure that all taxpayers pay their share. Consequently, the vast majority of residents should hope this endeavor succeeds.

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This editorial was written by a member of the American Press Editorial Board. Its content reflects the collaborative opinion of the Board, whose members include Bobby Dower, Jim Beam, Crystal Stevenson and Donna Price.

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