Pennsylvania hopes to bring millions of dollars into the cash-hungry state treasury with a tax amnesty plan to be announced Monday.
During the 54-day amnesty period, all penalties and half the interest will be waived for businesses and individuals that pay off delinquent taxes accrued through June 2009.
The program is inspired by the success of an amnesty last year in New Jersey, which raised a record $725 million in six weeks. A 1995-96 amnesty in Pennsylvania waived penalties but required full payment of taxes and interest, but this year's program follows New Jersey's with a no-penalty, half-interest offer aimed at enticing more delinquents to settle up.
Pennsylvania included an anticipated $190 million from a tax amnesty program when it balanced its budget last year.
"That money is already in the budget,'' Rendell spokesman Gary Tuma said. "The hope is by offering the amnesty program as an incentive we can bring in the money we need.''
The Revenue Department estimates that the commonwealth is owed about $2.1 billion in back taxes from more than 1 million businesses and individuals, spokeswoman Stephanie Weyant said. But some of the delinquent amounts date back to the department's formation in the 1920s and are unlikely to be collected.
Some criticize amnesty programs as undermining compliance with tax laws if overused, so Pennsylvania's plan includes some disincentives as well as incentives.
Participants are barred from future amnesty programs, and those who fall into tax delinquency within two years after the program may have to pay the full penalties and interest that had been waived. In addition, a 5 percent penalty will be levied against delinquent taxes, penalties and interest not paid in full after the amnesty period ends.
Officials also say the commonwealth plans to publish lists of tax scofflaws.
"We've found that public embarrassment actually works well,'' Weyant said. "It has been a successful enforcement tool.''