Mesa will become the first city in the Valley to offer a Tax Amnesty Program to the business community. Beginning June 1 through July 31, business owners will be allowed to submit unfiled Transaction Privilege (Sales) Tax, Transient Lodging Tax and Use Tax returns for periods through December 2016 without penalty and with a 50 percent reduction in interest due on delinquent balances. Businesses that currently have an unpaid tax balance with the city of Mesa are also invited to participate in this program.
A tax amnesty program will generate tax revenue, clean up aging tax accounts receivable balances and clear delinquent tax returns. While the amnesty program will not result in the collection of all amounts due, a compliance rate of 60 percent will amount to more than $581,000 in collections.
Taxpayers who have already paid penalties and interest during the liability period are ineligible for a credit or refund for those payments. Receivables created as the result of an audit will not be eligible for the program due to state of Arizona Audit Administration.
Cities such as Tucson have been quite successful with their tax amnesty programs, where they waived all penalties and half of the interest due. Tucson held its amnesty program in 2009 and 2015, collecting more than $2.9 million. Arizona’s amnesty program in 2015 recovered more than $55 million when they were projecting only a $15 million recovery. Due to the success of that program, the state conducted another tax amnesty program from Sept. 1, 2016 through Oct. 31, 2016.