AUGUSTA – One taxpayer.
One tax bill for $1.5 million.
One chance for all state residents to come clean about taxes they owe on Internet and out-of-state purchases without having to pay interest and penalties.
The case of a single, honest taxpayer who has come forward to pay $1.5 million in use taxes prompted the state to create a six-month amnesty period for everyone.
From July until December, residents can pay use taxes they owe for any three years between Jan. 1, 2000, and Dec. 31, 2005, without having to worry about interest and penalties.
“It allows people for a six-month period to fess up,” said Mike Allen, the director of economic research for Maine Revenue Services. “It’s a one-time opportunity to come in and make good. All we’re looking for is the tax.”
The program has the potential to affect a lot of people, Allen said, but the motivator was a taxpayer who approached the state with an unpaid bill and the desire to square up.
The person, who the state wouldn’t identify, spent a lot of money purchasing what Allen described as collectibles, but was unaware that Maine’s use tax applied. When the person realized the mistake, he or she came forward with a willingness to pay the tax bill but not interest or penalties.
“It’s an opportunity to get some money that we would probably have a tough time getting otherwise,” Allen said. “Certainly we’re looking for everyone to come forward and make right on this issue … But we’re looking for those people who owe a significant amount.”
While the state is hopeful that the program will attract broader participation, it has only budgeted the $1.5 million in revenue that’s expected from that one person. Anything else would be extra.
In addition to paying the tax bill, participants in the program also sign a statement promising to go forward in compliance with the law, Allen said.
The temporary grace period was approved as part of the state’s supplemental budget.