Governor Pitches Tax Amnesty Plan

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CARSON CITY, Nev. (AP) - Nevada Gov. Jim Gibbons announced plans
Monday for an amnesty program for businesses that are delinquent on
about $100 million in taxes that, if paid, could help the state deal with a looming revenue shortfall of more than $900 million.

The proposal, being discussed by the Nevada Tax Commission, would temporarily suspend interest and penalties on delinquent sales and use taxes, and business taxes and license fees. The program would take effect July 1.

Gibbons said he hopes to "entice full payment of outstanding back taxes while encouraging businesses not already registered with the state to do so."

"Anyone who comes forward will still be obligated to pay all the underlying taxes they owe, which should generate significant state revenue during this difficult fiscal period," the governor stated.

While the amount of delinquent taxes is about $100 million, such programs in the past have produced only a small part of the total due.

The most recent large-scale amnesty program in Nevada was in 2002 and brought in more than $7.3 million in revenue, Gibbons said. That program applied to businesses that owed more than $100 million. However, nearly half of the total already had been written off by the Tax Commission when the 2002 amnesty program started.

A similar amnesty program in 1993 generated more than $2.8 million.

Besides the tax amnesty effort, Gibbons has formed a commission that will try to reduce government waste. The panel will work closely with state agency leaders who have started preliminary meetings on the spending plan that Gibbons will submit to lawmakers early next year.

The current $6.8 billion state budget has gone through big changes as a result of a revenue shortfall projected to top $900 million by mid-2009. Gibbons ordered a 4.5 percent cut in budgets for most agencies in January. He and legislative leaders followed up in April with still more reductions.

While the reductions delayed many state building projects and some new programs, the plan avoided layoffs of state workers or cuts in operating budgets of government agencies, and preserved scheduled pay raises for state employees and teachers.

(Copyright 2008 by The Associated Press. All Rights Reserved.)