New Jersey Announces Amnesty to Include All State Tax Liabilities; Failure to Participate may Result in Additional Penalties

On February 17, 2009, New Jersey Governor Jon S. Corzine announced a total of $3.6 billion in budget cuts and other actions. During this announcement, he requested the Legislature to enact a Tax Amnesty Program (“Program”) which shall end no later than June 15, 2009. The New Jersey Senate and Assembly enacted N.J. Rev. Stat. § 54:53-19 on March 17, 2009, which requires the Director of the Division of Taxation to establish such amnesty.

The Division of Taxation (“Division”) released the details of the Program on March 20, 2009. The amnesty period will begin on May 4, 2009 and end on June 15, 2009. It will apply to state tax liabilities for returns due on or after January 1, 2002 and prior to February 1, 2009. Any taxpayer who is under criminal investigation or charged for any state tax matter is ineligible for the Program.

All penalties, recovery fees, and one-half of the balance of interest that remains due as of May 1, 2009 will be waived as long as payment of all tax owed and one-half of the balance of interest that remains due is paid in full during the amnesty period. If a taxpayer who is eligible for the amnesty fails to participate in the Program, a 5% penalty that may not be waived will be assessed in addition to all other penalties, interest, or collection fees to periods under the Program.

The Division is implementing a public awareness campaign that will include a special call center and a mailing to all taxpayers who are known to have deficient or delinquent accounts that may be eligible for the Program.