Massachusetts Sales Tax Amnesty Program

Last week, both the House and the Senate in Massachusetts approved an amendment to the 2015 year budget for tax amnesty. One of the things the amendment grants amnesty for is sales and use tax. If Governor Duval Patrick signs off on the bill, tax amnesty will go into effect for two consecutive month next year, allowing businesses to pay for errors and mistakes without having to be subject to severe fines and audits. Instead, the taxpayers will be able to pay for mistakes without having to add on even more.

If you do business in Massachusetts and collect sales tax, now is the time to prepare for a tax amnesty. Don’t wait until the two month period to take advantage of this program because you’ll want to file as soon as possible to ensure your business is in the clear. The best method is to use an automated program to look through your past sales tax filings and search out errors. Make a list of the errors, gather together supporting documents, and get ready to pay. It can save you a whole lot in the long run. Why is Massachusetts doing this? Because when businesses self-report, it saves everyone money. The state will get past taxes that might never have been recouped without the amnesty. Businesses get out from under the burden of a potential audit and don’t have to pay fines. It’s really a win-win for everyone.

Keep in mind that willful neglect doesn’t qualify for amnesty programs, as is true in most states. If you just didn’t collect sales tax because you didn’t feel like it, you’re out of luck in this program. As soon as the governor signs the bill, which we expect him to do since he signed a similar 2009 bill, the Commissioner of Revenue will set out the specific rules for the amnesty program. Don’t wait till the dates are set—start self-auditing now. Using automated tools for the process can really make a huge difference in correcting past errors and avoiding future ones. Be sure to check out the DisclosureLINK software and ask for a free evaluation to see how much you could self-report during the amnesty period—and how you can avoid huge penalties during an audit.

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