SB 0894 Establishes sales tax holiday, provides tax amnesty & limits sales tax overpayment refunds
LR Number:3680L.06C Fiscal Note:3680-06
Committee:Ways and Means
Last Action:05/17/02 - H Calendar S Bills for Third Reading Journal page:
Title:HCS SCS SBs 894, 975 & 927
Effective Date:Emergency Clause
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Current Bill Summary

HCS/SCS/SBs 894, 975 & 927 - This act requires that amnesty shall be granted for all interest and additions to tax with respect to unpaid taxes that are paid in full between August 1, 2002, and September 30, 2002; such amnesty shall not apply to persons involved in a criminal or civil litigation related to the tax liability nor to persons involved in an appeal to the Administrative Hearing Commission or a protest with the department of revenue regarding such tax liability; certain other requirements must be met; the amnesty provisions of this section apply to all taxes administered by the department of revenue, i.e. includes both sales and income taxes.

The act creates a state and local sales tax holiday for items of clothing (costing no more than $100 each), school supplies (costing no more than $50 per purchase) and personal computers (costing no more that $1,000 each) sold during two three-day periods in August, 2002 and 2003. The state will reimburse all local tax revenues lost in calendar year 2002 and individual political subdivisions may, by ordinance, opt their local sales taxes out of the holiday exemption beginning in calendar year 2003. A joint legislative committee is created to study and review the effect of the sales tax holiday and to report their findings and recommendations to the General Assembly by January 8, 2004.

The act prohibits retailers from obtaining refunds of sales taxes without crediting the original purchasers, except that it allows over-collections of less than $1,000 to be refunded without the higher burden of returning the funds to the purchaser; this $1,000 threshold is an aggregate sum over a five year period. Regardless of the amount of the refund claimed, if the retailer submits amended sales tax returns showing the correct amount of gross receipts and proves that the overpaid tax was paid by the retailer and not by a purchaser, then such retailer will be entitled to a refund of the amount claimed.

The act has an emergency clause with an effective date of July 1, 2002, and a sunset date for the sales tax holiday of July 1, 2004.