State proposes waiving tax penalty

Wednesday, Jan. 28, 2004 | 9:35 a.m.

CARSON CITY -- Because of confusion surrounding new state business taxes, the state Department of Taxation wants to cut some slack for businesses in making their first payments of the payroll tax.

Department Director Chuck Chinnock said Tuesday he will ask the state Tax Commission Monday to adopt an emergency regulation to allow him to waive penalty and interest if the taxpayer submits a payment late for cause.

He said numerous taxpayers have asked the department for advice because they are confused about their obligations under the taxes and a requirement to register to pay a $100 annual fee.

"The department's staff has been unable thus far to provide adequate guidance and advice to all taxpayers who have expressed confusion about the new taxes and registration requirements," says the proposed emergency regulation.

The Taxpayer's Bill of Rights in the law entitles taxpayers to obtain advice from the department on the taxes. In this case, Chinnock said the regulations on how the taxes would be imposed came out late.

The first payment of the gross payroll tax is due Monday for the October-December period. If the business is a few days late and has a valid excuse, Chinnock said the penalty and interest could be waived.

He said there could be problems, such as the department sending the tax forms to the wrong address or a mix-up with an accountant for the business.

The penalty is 10 percent of the tax due and the interest is 1 percent a month on the tax due.

The tax of 0.7 percent is imposed on the gross payroll of a business that is allowed to deduct the amount paid for health insurance or health costs for employees. The rate goes down to 0.65 percent on July 1.