Hawaii Offers Tax Amnesty

May 28, 2009

Tax scofflaws in Hawaii are being offered a tax amnesty:

Over the next month, the state is offering a tax amnesty program encouraging offenders to step forward to pay what they owe without being charged a penalty.

It’s the first time Hawai’i has offered such a program, joining a growing number of states doing the same as they look for quick tax revenue injections. The state’s Tax Fresh Start began yesterday and will run through June 26.

Our take:

At least seven other states — Alabama, Arizona, Maryland, Connecticut, Massachusetts, New Jersey and Virginia — are pursuing similar amnesty programs this year to replenish tax coffers.

“It’s a rather popular way to get ‘new’ revenue,” said Joe Henchman, director of state projects at the Tax Foundation in Washington. “It is a trend this year we are seeing.”[…]

Henchman said amnesty programs have another downside in that people who’ve dutifully paid their state taxes will feel left out. Tax cheats may wait for such programs to come around again if a state repeatedly offers amnesty over a several-year period, he said.

“People will come to expect them,” he said.

But there are no plans to run an amnesty here again. Kawafuchi said the state is undertaking it only because it has to balance off tax fairness with economic realities.

Ah yes, they always say it’s a one-time thing. Oklahoma has done its one-time amnesty at least twice (some say three times) since 2002.

More on Hawaii here.


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