So would you pay your taxes on time if you could keep the money in the bank, pay it later and not face any penalty at all?
That’s the question that taxpayers may be asking themselves now that the state has enacted yet another amnesty program.
In essence, it says that if you haven’t paid prior income or sales taxes that were due before the beginning of 2014 you can come forward now, pay what you should have paid and be done with it.
And no civil or criminal charges.
Daniel Scarpinato, press aide to Gov. Doug Ducey, who signed the law, pointed out that the measure is retroactive only. And that, he said, should make people think twice about counting on a future amnesty.
“We’re not necessarily going to do this every year,” Scarpinato said.
“People shouldn’t roll the dice with the law or with paying their taxes,” he continued. “They should follow the law, they should pay their taxes.”
But here’s the thing: The record suggests that this could be a gamble some individuals and businesses might want to make.
This is the sixth time the state has enacted an amnesty program, more formally known as a “tax-recovery program.” In fact, there has not been a time since the early 1980s where there has not been some form of retroactive relief available.
The program is pretty sweet.
It says that if you come forward between Sept. 1 and Oct. 31 and confess to owing some sort of tax that was due before 2014, you can pay up now without the usual penalties and interest that would otherwise apply.
In fact, this new version contains something that was not in prior amnesty programs.
You don’t even need to come up with all that you owe right now. The state is offering a payment plan, allowing errant taxpayers until Oct. 31, 2018, to pay off the debt.
And that could bring in people who could not qualify for earlier offers simply because they did not have the cash on hand to come clean with the state.
But that still leaves the question: Given the 30-plus year history of amnesty programs, why should individuals and businesses pay their taxes on time?
One is the possibility of the state finding you before you’re ready to pay up.
The program is not available to taxpayers who are already are being audited. Nor are those who already are party to any criminal proceeding related to the failure to file or pay taxes.
But even with those restrictions, prior amnesty programs have shown there are a lot of taxpayers out there who have been flying below the auditor’s radar.
A 1983 program brought in $6 million.
Lawmakers didn’t act again until 20 years later. But that program was retroactive to 1983 and brought in $73 million.
A 2009 amnesty brought in $32 million, with another one two years later shaking free an additional $13 million. And the 2015 law generated more than $50 million.
There are no estimates of how much lawmakers hope to collect with the new program.
“If we can shake some more out, great,” Scarpinato said.
But why stay current with the state?
“You shouldn’t take chances with this stuff,” Scarpinato said.
But Sean Laux, spokesman for the Department of Revenue, acknowledged that, given the history, some taxpayers may opt to sit on their taxes owed and wait.
“There is always that potential incentive for betting on a future tax-recovery program that will include future periods,” he said.
“How likely that is, I can’t really say,” Laux continued. “But you’re not necessarily wrong.”
Sen. Don Shooter, R-Yuma, said the more often lawmakers approve amnesty programs — and the more Arizonans start realizing how frequently they occur — the greater the chances that some taxpayers will sit on the sidelines, taxes unpaid, and wait for the next one.
“At a certain point, when does it become counterproductive?” said Shooter, who chairs the Senate Appropriations Committee.
“I hope they don’t read your story,” he continued. “But I think it’s a legitimate viewpoint.”
Shooter said he opposed the latest amnesty program for exactly that reason.
“But the pro side won out,” he said.