Missouri prepares to give a break to late taxpayers

JEFFERSON CITY, Mo. -- The state of Missouri is preparing to make a deal with delinquent taxpayers: Pay up in the next three months and avoid being penalized or paying interest.

While the offer appears overly generous for a state government, it's purely practical. Missouri needs the money to help fund education and officials hope that by showing a little mercy, people will pay their delinquent taxes.

Carol Fischer, director of the state Department of Revenue, put it this way last week: "In many instances, the interest and penalties often exceed what a taxpayer owes in back taxes. Tax amnesty is a great opportunity to pay the tax and have the interest and penalties waived."

That opportunity begins Thursday and ends on Oct. 31.

Fischer's comment was the first salvo in a $150,000 state campaign to promote the amnesty program, which applies to about 20 different levies including estate and income taxes.

Lawmakers, with the backing of Gov. Bob Holden, approved the tax amnesty provisions in May as the state sought ways to bridge the $167 million gap in the state budget.

The approach isn't a new one in Missouri or elsewhere in the nation.

While state officials don't know how many of the 200,000 delinquent taxpayers in Missouri will take advantage of the offer, they hope to rake in between $15 million and $20 million.

The amnesty will apply for almost all taxes due before Jan. 1, 2002. Even those who dispute their bills can qualify for amnesty if they drop their challenge and pay. But if a lawsuit has been filed for collection of delinquent taxes, amnesty is out of the question.

A previous Missouri amnesty program in 1983 produced about $900,000, but state officials claim it wasn't heavily promoted. In 1998, Wisconsin's amnesty program brought that state about $31 million. In 1999, New Mexico raised $45 million and after a dismal first try in 1998, Louisiana's amnesty program raised $178 million last year.

Brian Long, the state budget director, said a lot is riding on the offer.

"It's an important piece of delivering a balanced budget," Long said. "This is certainly one of those things we have to work out and this is a significant amount of money. If it does not work out, adjustments will probably have to be made."

A chance of success

Holden, meanwhile, is optimistic that people will take advantage of the opportunity.

"It has been shown to be successful and other states have done it," Holden said last week. "We're hoping it generates the revenue we calculated during the session. As long as you've got a good process in place and you're proceeding in a professional way, I think we have a chance of being successful."

Fischer, however, warned those who decide not to participate by the Oct. 31 deadline.

"We will become much more aggressive in our collection efforts after Oct. 31," Fischer said. "And our propensity to settle will drop."