Spin Control

Special Session Day 8: Tax amnesty pulls in $321 million

OLYMPIA -- The state collected $321 million in delinquent taxes from nearly 9,000 businesses through an amnesty program that ended Saturday. The success of the program surprised state officials, who were expecting to pick up about $24 million when the program was proposed in December.
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The money could help legislators figure out a solution to the state's budget problems, which have them in the second week of their special session and talking about the need for a second 30-day overtime period.
"I'm not interested in a second special session. With this information, they can go home," Gov. Chris Gregoire said in announcing the results of the tax amnesty Tuesday.
The state opened a 90-day window for businesses who owed back taxes to pay up without penalty or interest. Just under 11,000 applied, and 8,888 were accepted. Most were small businesses, by a few were large businesses, at least one of which had taken the state to court over its tax bill. That company, which Gregoire said she couldn't name because tax information is confidential, dropped the lawsuit and settled with the state for "tens of millions of dollars."
Businesses had to pay their overdue taxes in full, but were spared penalties and interest.Some businesses  weren't registered with the state and had not paid taxes previously.
Gregoire insisted that the uncollected tax revenues were not a sign the Department of Revenue was lax on collections, but that businesses struggling in a difficult economy were putting off tax payments while they paid other bills and "kept the doors open."
Of the money collected, the state keeps $263 million for the general fund and will send $57 million to local governments who were also stiffed by the businesses. Gregoire is suggesting legislators use $182 million of the tax windfall to the state's monthly payment to schools in June, reducing the amount they were expecting to carry over into the next biennium.

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Jim Camden
Jim Camden is the Olympia bureau chief, covering the Legislature and state government. He also is a political columnist and blogger for Spin Control.

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