HB 2615
In CommitteeHouse
Tax voluntary disclosure
Codifying the voluntary disclosure tax program and authorizing temporary tax amnesty.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill establishes a voluntary disclosure program for businesses to come forward and report unreported tax activity without facing penalties, effective July 1, 2027, and creates a one-time tax amnesty allowing eligible businesses to waive penalties and interest on past-due taxes if they file and pay by August and October 2026, respectively.
- Creates a new voluntary disclosure program starting July 1, 2027, allowing businesses to disclose previously unreported tax activity and avoid penalties if they meet eligibility criteria (e.g., no prior fraud, no recent contact from the Department of Revenue).
- Grants a one-time penalty and interest waiver for certain past-due taxes (e.g., business and occupation, sales, and use taxes) if taxpayers file returns and pay in full by August 17 and October 1, 2026, respectively.
- Requires applicants for the penalty/interest waiver to have no prior evasion penalties, no criminal tax convictions, and no current audits or overdue balances.
- Amends existing law to clarify the order of payment application (interest → penalties → fees → other amounts → taxes → spirits taxes) and allows the Department of Revenue to refuse non-electronic returns that lack payment.
- Authorizes the Department of Revenue to issue rules implementing the voluntary disclosure program and to rescind agreements within one year if fraud or misrepresentation is discovered.
Who is affected
- Small and medium-sized businesses with past tax liabilities — Businesses that have underreported or failed to report taxes (e.g., business and occupation tax, sales tax) for periods before July 1, 2026, and meet strict eligibility criteria, can receive full waiver of penalties and interest if they file returns and pay in full by specific deadlines in 2026.
- Businesses with unreported tax activity seeking compliance — Businesses that have never been audited or contacted by the Department of Revenue for tax enforcement in the prior four years, and who self-disclose unreported activity, can avoid penalties by joining a new voluntary disclosure program starting July 2027.
- Taxpayers under audit or with outstanding debts — Taxpayers who are currently being audited or have past-due balances are excluded from both the voluntary disclosure program and the penalty/interest amnesty.
- Businesses handling resale certificates — Businesses that use reseller permits or resale certificates must ensure proper use, as misuse disqualifies them from both the voluntary disclosure program and the amnesty.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
The one-time penalty and interest waiver allows eligible small and medium businesses to resolve long-standing tax liabilities without facing financial ruin — potentially saving thousands in penalties and interest, and enabling them to reinvest capital into operations, payroll, or expansion.
FinancialPeopleRef: Sec. 2 (entire section); Sec. 1 (voluntary disclosure program)The voluntary disclosure program (starting July 2027) encourages compliance among previously noncompliant but low-risk businesses by removing fear of penalties — potentially bringing informal or underreporting businesses into the formal economy, increasing fairness and long-term revenue stability.
Business & EmploymentPeopleRef: Sec. 1(1), (2)(a)-(d); Sec. 2(1)(f), (g), (h)The clarified payment application order (interest → penalties → fees → taxes) ensures that voluntary payments reduce liabilities predictably, reducing confusion and administrative burden for both taxpayers and the Department of Revenue.
FinancialRef: Sec. 3(5)The bill expands flexibility for electronic filing/payment waivers for businesses with “good cause” — including lack of internet access or banking — which may help small, rural, or marginalized operators comply without penalty.
Business & EmploymentLean peopleRef: Sec. 3(2)(a)(vi), (b), (c); Sec. 3(8)(b)The bill clarifies how payments are applied to overlapping liabilities, reducing disputes over payment allocation and improving administrative efficiency — benefiting both the state and compliant taxpayers.
FinancialRef: Sec. 2(7); Sec. 3(5)
Potential Concerns (5)
The penalty and interest amnesty excludes taxpayers who have ever received an evasion penalty, have a criminal tax conviction, or are currently under audit or have outstanding balances — effectively excluding the most severely delinquent or noncompliant businesses, while offering relief only to those who were otherwise compliant but made minor or technical errors. This limits the program’s reach to relatively low-risk taxpayers, reducing its broader fiscal impact but also limiting relief to those most in need.
FinancialRef: Sec. 2(1)(f), (g), (h); Sec. 1(2)(c)The bill requires full payment of all past-due taxes by October 1, 2026, and mandates electronic filing and payment for most returns — a burden for small, cash-constrained businesses that may lack digital infrastructure or liquidity to meet the tight deadlines, potentially forcing them into default or bankruptcy if unable to comply.
Business & EmploymentRef: Sec. 2(1)(c), (d); Sec. 3(6)The bill bars participants from challenging or seeking refunds on the tax liability they pay under the amnesty, and allows the Department of Revenue to rescind agreements within one year if fraud is alleged — creating a one-sided process that limits taxpayer recourse and gives the state broad retroactive authority.
Rights & LibertiesRef: Sec. 2(2), (3); Sec. 1(4)The bill requires payment of all outstanding invoices (including fees, surcharges, and warrants) to qualify for the waiver — a significant barrier for small businesses with complex or multiple outstanding obligations, even if the core tax liability is modest.
FinancialRef: Sec. 2(1)(a)(ii), (c); Sec. 3(5)The authority to refuse non-electronic returns without payment may disproportionately burden rural, elderly, or low-income businesses without reliable internet access or digital literacy, even with “good cause” waivers — which are discretionary and may not be granted in time to meet the amnesty deadlines.
Business & EmploymentRef: Sec. 3(6)
Who Is Most Affected
Small and medium businesses with past-due taxes but no prior evasion penalties or audits may benefit significantly by resolving liabilities without penalties — potentially saving thousands and improving cash flow. However, those with complex or multiple outstanding obligations may still struggle to meet the strict payment deadlines.
Businesses that have never been audited and self-report unreported activity may gain compliance certainty and avoid future penalties — encouraging voluntary adherence. However, those with informal or cash-based operations may lack documentation to qualify, limiting access.
Taxpayers under audit or with outstanding balances are explicitly excluded, meaning they face continued enforcement, penalties, and potential liens — increasing financial and legal risk for already vulnerable businesses.
Businesses using resale certificates must ensure strict compliance — misuse disqualifies them from both programs. This increases liability risk for those who misuse certificates, but may incentivize better recordkeeping across the board.
The state gains short-term revenue certainty from enforced payments but loses potential revenue from waived penalties and interest. Long-term, the bill may increase compliance and revenue by bringing informal businesses into the system — though the net fiscal impact is uncertain.