Tuesday March 29, 2005
For the next two months, employers and workers in Louisville Metro will have an unprecedented opportunity to lift a tax burden they may have been carrying around for years. And for years to come, Metro Government will be able to collect new revenues as additional people are added to the tax rolls.
These benefits are the result of Louisville’s first and only Occupational License Tax Amnesty Program, which was announced today and continues through May 31. The program could affect thousands of delinquent taxpayers who run businesses or work in Louisville.
While the actual tax owed must still be paid, the amnesty program eliminates penalties and interest for taxpayers who qualify.
“By participating in the amnesty program, delinquent taxpayers can start with a clean slate, and Metro Government can assure that these businesses and individuals are on the tax rolls, resulting in higher revenue for years to come. And more revenue means enhanced services across our community,” said Mayor Jerry Abramson.
“We encourage everyone to take advantage of this once-in-a-lifetime opportunity,” said Michael Tronzo, director of the Louisville Metro Revenue Commission. “Besides saving what could be substantial sums of money, businesses and individuals who participate will also avoid potential legal action.”
Only one tax is affected – the Occupational License Fee – which is imposed on business net profits and employee payroll withholdings. This tax generates about $325 million in revenue each year – money that supports police and fire protection, roads, parks, garbage pickup and other Metro Government priorities. A percentage of the revenue also helps support the Jefferson County Public Schools and TARC.
Any business or company that does business in Louisville Metro, regardless of size, owes the Occupational License Fee, adopted in 1948. For most people, it’s deducted from their paycheck, just like FICA or Social Security. The fee also applies to people who run their own business, do freelance work or otherwise work “on the side.”
A public awareness campaign is under way to tell the public about the program. A digital clock – mounted on a billboard on northbound Interstate 65 near the state fairgrounds – will count down the program’s 65 days. Advertising, direct mailings, speaking engagements and other communication efforts are also planned. Research has shown that intensive public outreach is critical to ensuring the success of amnesty programs.
Amnesty will work like this: Individuals or businesses that owe occupational taxes dating to Dec. 31, 2003, or before can pay it off during the amnesty period, and all penalties and interest are forgiven. In some cases, the penalties and interest add up to more than the original tax debt.
"We appreciate and welcome the opportunities and benefits associated with the tax amnesty program,” said Dr. Stephen Daeschner, superintendent of Jefferson County Public Schools. “With state budget cuts last year and the possibility of federal cuts this year, we are consistently seeking new funding sources. We are grateful to Mayor Abramson for his leadership and foresight and are confident the additional monies will continue to support our district's excellent programs and services to children."
Barry Barker, executive director of TARC, said the Occupational License Fee is critical to his agency. "Revenue collected from the Louisville/Jefferson County occupational license fee helps TARC fund the delivery of transportation services every day,” he said. “With the price of diesel fuel rising, every dollar collected assists TARC in being able to transport someone to work, to school, or to a medical appointment."
Tronzo emphasized the importance of complying before amnesty ends on May 31. “Amnesty is a one-time window of opportunity, and then it’s done,” he said. “After that, we plan to aggressively pursue violators. Our enforcement team of compliance, audit, legal and collection staff has been strengthened, giving us a greater ability to track down violators than ever before.”
Louisville is one of just 16 communities nationwide that meet the necessary standards to participate in the Internal Revenue Service’s data-matching program, which enhances the Metro Revenue Commission’s ability to track down taxpayers who don’t comply.
At today’s news conference, The Accountants – a local rock band featuring actual accountants – performed a song created just for the campaign. “Amnesty, no penalty / Interest-free, pay your license fee,” the band sang.
“Most people pay their fair share of taxes, and we simply want to hold everyone to the same standard,” Tronzo said. “Not paying what you owe isn’t fair to everyone else.”
To qualify for amnesty, you must complete and return an application by May 31 to the Metro Revenue Commission, 101 South 8th St., Louisville, KY 40202-2634.
Applications and information are available at www.louisvilletaxamnesty.com. If you’re not sure whether you owe, or you have other questions, call (502) 574-I-OWE (574-4693).