SRINGFIELD, Ill. – Gov. Rod R. Blagojevich today announced updated figures that show Illinois taxpayers paid $532 million in late, accelerated and new tax debts during the recently completed Illinois Tax Amnesty program, making it the most successful program of its kind in the country.
Preliminary figures estimated the state had taken in $504 million from 70,000 taxpayers during the Oct. 1 to Nov. 17 amnesty period, but Illinois Department of Revenue has reported an additional $28 million from another 11,000 taxpayers. The previous record for money collected through a tax amnesty program had been held by the state of New York, which took in $520 million earlier this year.
“Citizens with tax debts hanging over their heads flocked to tax amnesty,” the Governor said. “We gave taxpayers the chance to clear these debts and they responded. Besides clearing up some old debts due to the state, the money will help us deal with a historic budget deficit.”
Of the total amount generated by the amnesty, $185 million can be used for state budget purposes; which is $145 million more than the $40 million the Governor’s Office of Budget and Management had estimated when the fiscal year 2004 budget was passed in May. Another $92 million will go to Illinois local governments, and the rest will go to the Refund Fund or represents money that the state would have received later in this fiscal year.
Most of the tax amnesty participation came from individuals, who accounted for 90 percent of payments and 5 percent of dollars collected, according to the Illinois Department of Revenue. The average individual income tax payment was $400.
“We’re extremely pleased with the success of the program,” said Illinois Department of Revenue Director Brian Hamer. “We notified more than 200,000 taxpayers to make them aware, worked with civic and business groups to get the word out and ended up generating significant monies for hard-pressed state and local governments.”
Under tax amnesty, Illinois taxpayers who paid back taxes between Oct. 1 and Nov. 17 did not have to pay penalty and interest charges. For those who chose not to use amnesty, penalties and interest doubled beginning Nov. 18.
One of the surprises of the tax amnesty program was $153 million in payments from business taxpayers under federal audit who do not yet owe the state anything, but chose to pay during the amnesty period to protect themselves from possible future interest charges.
Tax amnesty was structured to bring money into the state coffers today that would not have been received until future years. Besides the cash infusion, tax amnesty broadened the tax base and increased efficiency. Non-filers who came forward will continue to pay in future years and resources the department would have used to collect money are available for other tax enforcement activities.