Smucker Says State Should Try Tax Amnesty To Pick Up Revenue

Given that the state revenue shortfall came in at $3.25 billion, Pennsylvania should look at every responsible alternative for plugging the budget hole instead of raising taxes, according to Senator Lloyd Smucker. He will be introducing legislation to offer a tax amnesty, to attract some of the estimated $1.6 billion outstanding that is believed to be collectable.

"Even with all the efforts over the years to improve collections and to crack down on tax delinquents, there is still a lot of money owed to the Commonwealth. It has been fourteen years since Pennsylvania offered an amnesty program, and the need to bring in revenue may never be greater than it is now. If this generates $150-200 million, then that money can be used to help balance the budget and fund the state programs that are core responsibilities and mean the most to individuals and communities," Smucker stated.

The proposal calls for a 3-month window, during which the state would forgo penalties and waive half the interest. It applies to taxes that were delinquent as of June 1, 2009.

Senate Majority Leader Dominic Pileggi said that tax amnesty is a constructive idea that fits well with the Senate Republican commitment to produce a balanced budget without increasing taxes.

New Jersey recently completed a tax amnesty period that saw more than $600 million collected, over three times what had been projected. "Obviously, they figured out a way to structure their program that enticed a lot of money to come in. We tried to take lessons away from their success," Smucker concluded.

Independent of this effort, the state Auditor General recently recommended a tax amnesty as one of several revenue-raising steps to close the budget gap.

Contact:

David Atkinson
(717) 787-6535