State & Local Tax Law Alert: Portland Revenue Bureau Announces Tax Amnesty Program
6/4/2012
The Portland Revenue Bureau recently announced a one-time amnesty program, from May 15 through July 16, 2012, for certain taxpayers who have failed to file returns pursuant to the Portland Business License Tax and Multnomah County Business Income Tax programs.
Eligibility. The tax amnesty program is limited to (1) taxpayers who do not have a tax account with the Revenue Bureau and (2) taxpayers who have an account but who have not filed returns with the Revenue Bureau in each of the three most recently completed tax years. The amnesty program does not cover other issues, such as incorrect apportionment of income to Portland/Multnomah County or understatement of income. Taxpayers who meet the above criteria but already have been contacted or pursued by the Revenue Bureau are still eligible for the amnesty program. Returns must be filed, and all amounts due must be paid or provided for by payment plan, no later than July 16, 2012.
Benefit of participation. Taxpayers are entitled to a waiver of penalties (which can be as high as 100% of the tax amount due) and a reduction of interest (from 10% to 5%) if returns are filed for all years of unreported business activity or if returns are filed for the five most recently completed tax years.
Consequences of non-participation. Taxpayers who could have filed under the amnesty program and did not will not be allowed to take advantage of the Revenue Bureau's voluntary compliance program. That means that even if the taxpayer later comes forward voluntarily, no limitations period will apply to unfiled tax returns, no interest abatement will be allowed, and penalties generally will be assessed.
About the taxes. Everyone doing business in Portland and Multnomah County is required to register as a taxpayer. "Doing business" generally includes the mere holding or renting of property. The Revenue Bureau also takes the position that certain trusts, estates, and family investment entities may be considered to be doing business in Portland and Multnomah County. There are no non‑taxable "pass-through" entities: partnerships, S corporations, and most limited liability companies are subject to the tax. Certain exemptions prevent imposition of the tax, including an exemption for gross receipts below an indexed threshold amount; however, exempt businesses must submit a request for exemption. The combined rate for a taxpayer within both the city and county limits is 3.65% of net income, subject to apportionment. For general information on the Portland Business License Tax and Multnomah County Business Income Tax, see here.
More information on the tax amnesty program, including an application form, can be found here. If you have further questions, please contact:
Chris Heuer at (503) 294-9206 or ckheuer@stoel.com
Adam Kobos at (503) 294-9246 or ackobos@stoel.com
Eric Kodesch at (503) 294-9684 or ejkodesch@stoel.com
Robert Manicke at (503) 294-9664 or rtmanicke@stoel.com
Kevin Pearson at (503) 294-9622 or ktpearson@stoel.com
Elisabeth Shellan at (503) 294-9887 or esshellan@stoel.com
IRS Circular 230 notice: The information contained herein was not intended or written to be used, and cannot be used, by you or any other person (i) in promoting, marketing or recommending any transaction, plan or arrangement or (ii) for the purpose of avoiding penalties that may be imposed under federal tax law.