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The Assembly on Tuesday, Aug. 4, 2020 during the fifth day of the 32nd Special Session of the Legislature in Carson City. (David Calvert/The Nevada Independent)

State officials have unveiled details about a tax amnesty program that is expected to recoup $21 million to help address the budget shortfall and give delinquent taxpayers a clean slate. 

During a special session over the summer, Nevada lawmakers passed SB3, which allows for a one-time tax amnesty program through which businesses or individuals doing business in Nevada can have penalties and interest waived on the condition that they pay their outstanding taxes.  

“We know a lot of individuals and companies are in very difficult situations and this allows them to address their tax obligations, without incurring penalties and interest,” said Barry Duncan, Government Affairs Representative and Analyst of the Nevada Taxpayer Association. “So in that way, it's an equitable approach to addressing the collection. And collecting the revenue that is due without putting an undue burden on those taxpayers, specifically during this time.” 

The program was part of $1 billion in budget-balancing measures to close a deficit spurred by the pandemic. Much of the strategy involved hundreds of millions of dollars in budget cuts, but tax amnesty was one of a few elements geared toward bringing in more revenue.

Taxation officials estimate there is about $350 million in overdue taxes, but only a small portion of that is considered collectable. 

The Nevada Department of Taxation this week announced the details for the program, which will run from Feb. 1 to May 1. Businesses or individuals may pay the overdue tax online or by mail. Penalties and interest will be waived when owed tax is paid in full within the three-month timeframe. 

If a taxpayer has several outstanding returns, the penalty and interest will be waived for each period that they are also able to pay in full, the department said. 

The program applies to monthly tax returns that were due and payable on or before June 30, 2020, and quarterly tax returns due on or before April 30, 2020, including for Sales and Use Tax, Modified Business Tax and Commerce tax, among others. 

The amnesty program does not include the lodging tax, real property transfer tax and locally assessed property tax. It also does not apply to businesses or individuals who have a compromise or settlement agreement with the Department of Taxation or Nevada Tax Commission regarding unpaid tax. 

Businesses and individuals who pay their delinquent tax through the amnesty program may be selected for an audit, in the same manner as those who do not pay the delinquent taxes during the amnesty program. 

Reporter Michelle Rindels contributed to this report.

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