Business Law Letter: ALERT-Oklahoma Voluntary Compliance Initiative 2015

09.14.15

The Oklahoma Legislature recently passed legislation authorizing the Oklahoma Tax Commission to establish a Voluntary Compliance Initiative and offer a tax amnesty to delinquent taxpayers for a period beginning on September 14, 2015 and ending on November 13, 2015.

Eligible Taxpayers

Any taxpayer (individual or business) that participates during this two-month period is entitled to a full waiver of penalty, interest and other collection fees or costs due on eligible taxes if the taxpayer voluntarily files delinquent tax returns and pays the taxes owed for any and all periods ending before January 1, 2015.  This waiver of penalty, interest, collection fees and costs associated with those tax periods also includes entering into and complying in full with the terms of a payment plan agreement established under the compliance initiative that does not exceed six (6) payments.  However, if the delinquent taxes are paid to a debt collection agency contracting with the Oklahoma Tax Commission, the taxpayer is still responsible for the payment of that fee.

Eligible Taxes

Penalties and interest imposed upon the following taxes are eligible for waiver pursuant to the compliance initiative:

  • Mixed beverage tax levied pursuant to Section 576 of Title 37 of the Oklahoma Statutes;
  • Gasoline and diesel tax levied pursuant to Section 500.4 of Title 68 of the Oklahoma Statutes;
  • Gross production and petroleum excise tax levied pursuant to Sections 1001, 1101 and 1102 of Title 68 of the Oklahoma Statutes;
  • Sales tax levied pursuant to Sections 1354 of Title 68 of the Oklahoma Statutes;
  • Use tax levied pursuant to Section 1402 of Title 68 of the Oklahoma Statutes;
  • Income tax levied pursuant to Section 2355 of Title 68 of the Oklahoma Statutes;
  • Withholding tax levied pursuant to Section 2385.2 of Title 68 of the Oklahoma Statutes; and
  • Privilege tax (commonly known as the bank in lieu tax) levied pursuant to Section 2370 of Title 68 of the Oklahoma Statutes.

Limitations

A taxpayer must have an outstanding tax liability that includes at least one of the above-listed eligible taxes for any and all periods ending before January 1, 2015.  If a taxpayer only owes penalty and interest to the Oklahoma Tax Commission, the taxpayer is precluded from participating in the Voluntary Compliance Initiative.  Similarly, a taxpayer who is currently in bankruptcy is also not eligible for participation in the compliance initiative.

Also, any taxpayer who has a protest pending with respect to an assessment of eligible tax made by the Oklahoma Tax Commission may participate in the Voluntary Compliance Initiative only if the taxpayer pays the taxes assessed in full and withdraws the protest.

Timing of Payments

A taxpayer must make a full payment of the taxes due between September 14 and November 13, 2015.  If a taxpayer cannot pay the taxes owed by this deadline, then a payment plan must be established during this same time period through an online dedicated payment plan application available on the Oklahoma Tax Commission website.  This system allows taxpayers to select which eligible tax debt they want to include in the payment plan and make their payment(s) online.

Payments made by taxpayers under the Voluntary Compliance Initiative may be in the form of cash, a check, a money order, electronic funds transfer, or may be charged to an approved credit card.

Practical Advice

The Voluntary Compliance Initiative offers a great opportunity for taxpayers who: (1) did not file required Oklahoma tax returns; (2) underreported tax due on previously filed tax returns; and (3) did not pay assessed eligible taxes to get compliant and have any penalty, interest, collection fees and costs associated with those tax periods cancelled.  Since the Voluntary Compliance Initiative only covers a two-month period, taxpayers with outstanding compliance issues should immediately contact the Oklahoma Tax Commission to determine if they are
eligible to participate and make any necessary payment arrangements.

By David J. Looby, dlooby@dsda.com

© 2015 Doerner, Saunders, Daniel & Anderson, LLP.  The Business Law Letter is a newsletter providing items of interest in various areas pertaining to business organizations.  While the Letter may alert you to potential problems or changes in the law, legal advice concerning specific problems can only be given by an attorney after careful consideration of the facts unique to a given situation.  Inquiries concerning the Letter or its contents should be directed to one of its editors, H. Wayne Cooper, Lawrence T. Chambers, Jr., William F. Riggs, David J. Looby or D. Benham Kirk.

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