SB 6348
In CommitteeSenate
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 one-time tax amnesty program for certain past-due taxes and creates a new voluntary disclosure program to encourage future compliance. It allows eligible businesses to avoid penalties and interest on older tax debts if they file and pay by specific 2026 deadlines, while also formalizing an existing practice of waiving penalties for new voluntary disclosures starting in 2027.
- Creates a voluntary disclosure program starting July 1, 2027, allowing businesses to come forward and register for past-due taxes without penalties (but not interest).
- Grants a one-time penalty and interest waiver for certain past-due taxes (e.g., B&O, sales, use taxes) if taxpayers file all missing returns and pay in full by August 17, 2026 (filing) and October 1, 2026 (payment).
- Sets strict eligibility rules: no prior evasion penalties, no criminal tax convictions, no recent contact from the Department of Revenue for enforcement, and no fraud or misrepresentation.
- Requires electronic filing and payment for most taxpayers, with limited exceptions for 'good cause' (e.g., no internet access, no bank account).
- Authorizes the Department of Revenue to create rules and verify claims, and to cancel agreements if fraud is discovered within one year.
Who is affected
- Small and medium-sized businesses with past-due tax liabilities — Businesses that have unpaid tax liabilities (e.g., business and occupation tax, sales tax) from periods before July 1, 2026, and who meet all eligibility criteria, can avoid penalties and interest if they file and pay by specific deadlines in 2026.
- Compliant businesses with clean histories — Businesses that have never been found guilty of tax evasion or misuse of reseller permits and who file and pay on time can receive a one-time waiver of penalties and interest on older liabilities.
- Noncompliant or high-risk taxpayers — Businesses that fail to meet the strict deadlines (August 17, 2026 for filing, October 1, 2026 for payment) or who have prior evasion penalties or criminal tax convictions will not qualify and remain liable for full penalties and interest.
- Businesses in active bankruptcy proceedings — Taxpayers in bankruptcy may be excluded from the amnesty if payment would violate federal bankruptcy law.
Pro/Con Analysis
Potential Benefits (5)
The one-time penalty and interest waiver—available to eligible businesses with past-due B&O, sales, or use taxes—can provide critical financial relief to small and medium businesses struggling with legacy tax debt, enabling them to resume operations without crushing liabilities, especially those that made honest past errors but are now compliant.
Business & EmploymentPeopleRef: Sec. 2(1)(a), (b), (c); Sec. 1(1)The formalized voluntary disclosure program starting July 1, 2027, encourages future compliance by removing penalty risk for new filers who self-report, which may reduce audit pressure on honest businesses and improve long-term revenue stability—particularly helpful for new or reactivated businesses hesitant to engage with DOR.
Business & EmploymentPeopleRef: Sec. 1(1); Sec. 1(2)(b), (c), (d)By requiring full disclosure, banning fraud/evasion participants, and allowing DOR to verify and rescind agreements within one year, the bill includes strong anti-abuse safeguards that help ensure the program targets genuinely compliant taxpayers—not just those seeking windfalls—preserving public trust in the tax system.
Public SafetyPeopleRef: Sec. 2(1)(e), (f), (g); Sec. 1(2)(a), (c), (d)The 'good cause' waivers for electronic filing/payment (e.g., no bank account, no internet) provide limited but meaningful flexibility for rural, elderly, or low-income taxpayers—though narrow—helping prevent total exclusion from the program due to infrastructure barriers.
Business & EmploymentLean peopleRef: Sec. 3(2)(b), (3)(b); Sec. 3(8)(a)While the state may see short-term revenue loss from waived penalties/interest, the bill’s long-term goal of improved compliance and new registrations could increase overall tax collections—potentially benefiting local governments that rely on state revenue sharing for services like schools and infrastructure.
Local GovernmentLean peopleRef: Fiscal Impact Summary
Potential Concerns (5)
The strict eligibility criteria—including bar on prior evasion penalties, criminal tax convictions, or recent DOR enforcement contact—may inadvertently exclude many small businesses that made honest errors or faced temporary financial hardship but are now trying to comply, thereby reducing their access to relief and potentially increasing enforcement pressure on vulnerable taxpayers.
Public SafetyLean industryRef: Sec. 2(1)(f), (g); Sec. 1(2)(c), (d)Mandatory electronic filing and payment with only narrow 'good cause' waivers (e.g., no bank account, no internet access) disproportionately burdens low-income sole proprietors, gig workers, and micro-businesses who lack digital infrastructure or financial services access—groups already at higher risk of tax noncompliance due to cash-based operations.
Business & EmploymentIndustryRef: Sec. 2(1)(c), (d); Sec. 3(2)(a), (3)(a)The exclusion of taxpayers who have ever received an evasion penalty or been convicted of criminal tax violations—regardless of how long ago or how minor the offense—creates a permanent penalty that prevents long-term reintegration into the formal tax system, disproportionately affecting low-income and minority entrepreneurs with prior legal entanglements.
Business & EmploymentIndustryRef: Sec. 2(1)(f), (g); Sec. 1(2)(c), (d)The requirement to file and pay all outstanding returns and taxes by August 17 and October 1, 2026 respectively—without flexibility for complex cases—may pressure small businesses into rushed filings, underreporting liabilities to meet deadlines, or abandoning the program altogether, reducing actual compliance gains.
Business & EmploymentIndustryRef: Sec. 2(1)(c), (d); Sec. 3(2)(a), (3)(a)The provision that taxpayers who receive penalty/interest relief may not later challenge or seek refunds on the underlying tax liability—even if later found to be erroneous—剥夺ates due process rights and may lock in incorrect assessments, especially for businesses without adequate accounting support.
Rights & LibertiesLean industryRef: Sec. 2(2); Sec. 2(3)
Who Is Most Affected
Small and medium businesses with past-due tax liabilities (e.g., B&O, sales tax) that meet strict eligibility criteria—no prior evasion, no criminal conviction, no recent DOR enforcement contact—stand to gain significant financial relief by avoiding penalties and interest if they file and pay by the 2026 deadlines. However, those with complex histories or limited digital access may be excluded or pressured into rushed compliance.
Compliant businesses with clean histories benefit indirectly from reduced competitive disadvantage against noncompliant rivals and may gain confidence in the system. However, they receive no direct benefit and may face higher future compliance costs due to DOR’s expanded verification authority.
Noncompliant or high-risk taxpayers—including those with prior evasion penalties, criminal convictions, or recent DOR enforcement contact—are explicitly excluded and remain fully liable for penalties and interest. This may increase enforcement pressure on vulnerable groups and discourage voluntary disclosure in the future.
Businesses in active bankruptcy may be excluded if payment violates federal bankruptcy law, but those emerging from Chapter 11 may benefit from a clean slate if they meet deadlines. However, bankruptcy attorneys and trustees may face added administrative burden verifying eligibility.
Low-income sole proprietors, gig workers, and micro-businesses with cash-based operations may be unable to meet the electronic filing/payment requirement due to lack of internet, bank accounts, or digital tools—effectively excluding them from relief and increasing their compliance risk.