New York Tax Amnesty Nets State $375 Million

by Leroy Baker, Tax-News.com, New York

07 April 2003

A tax amnesty programme in New York State has netted the state treasury around $200 million more in revenues than originally envisaged, according to reports.

When the amnesty was announced last year it was expected to bring in around $175 million for the state. However, the programme - which ran from November 2002 to January 2003 - netted treasury coffers some $375 million. The amnesty also raised $145 million for New York City and other local government areas, according to a spokesman for George Pataki, NY state governor.

The amnesty was aimed at those who had disputed or unpaid tax returns prior to January 2001, and included personal income, corporate and franchise taxes as well as some sales and use taxes. Around 56,000 people came forward and avoided criminal prosecution or fines for previous non-payments. The state also waived the interest payments usually applied to back taxes.

Whilst this was a piece of good news for the state government, it is a drop in the ocean in relation to a reported $11.5 billion shortfall in the fiscal budget.

To compound Governor Pataki's misery still further, a decision to sell $4 billion worth of bonds was recently shelved because it was to be backed by the proceeds from the case against tobacco company Phillip Morris. However, Phillip Morris has indicated that it may not be able to make its next payment to the state as a result of pending litigation against it.

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