Maryland's tax delinquents will catch a break this fall. So will the state itself.

State lawmakers have approved a tax amnesty plan that should generate some much-needed revenue by helping delinquent taxpayers “satisfy their tax debts with all the civil penalties and half of the interest waived,” according to the state comptroller's office.

The amnesty period will run from Sept. 1 through Oct. 30, 2009 and will apply to:

• state and local individual income tax,
• corporate income tax,
• withholding tax,
• sales and use tax, and
• admissions and amusement tax.

Here's the lowdown from Beverly Richard, a state and local tax specialist with SC&H Group and chair of the MACPA’s State Taxation Committee:

“State Comptroller Peter Franchot will waive all civil penalties except for previously assessed fraud penalties, as well as one-half of the interest imposed against a taxpayer who failed to file a return or pay the tax imposed on or before Dec. 31, 2008. This waiver applies to non-reporting and under-reporting of taxes, as well as non-payment of taxes.

“The taxpayer must file any delinquent returns, pay all tax due and one-half of the interest in order to participate in the program. At the comptroller's discretion, the taxpayer may enter into a payment plan under the amnesty terms. The plan would require the taxpayer to pay all the delinquent tax and one-half of the interest in full by no later than Dec. 31, 2010.  If the taxpayer fails to pay in strict accordance with the terms of the payment plan, the waiver of penalties and interest will be void.

“The waiver of one-half of the interest does not apply to interest accruing after Oct. 30, 2009 on any remaining unpaid amounts.”

Richard has written an article that takes a closer look at the tax amnesty program, including details about who is not eligible to participate. Read the article here.

You can read the amnesty bill in its entirety on the General Assembly's Web site.