There’s a carrot, there’s a stick, and the carrot comes first.
The Tacoma City Council on Tuesday passed an ordinance proclaiming amnesty for businesses that are delinquent or invisible in matters related to licensing and taxation.
Of perhaps 23,000 enterprises operating in Tacoma, there are currently 4,600 “with delinquent tax returns, license fees or penalties on their accounts, with an estimated total of $1.4 million due,” the ordinance stated.
There are also “2,000 known unlicensed businesses; and an unknown number of unlicensed businesses currently operating in the city.”
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The ordinance serves notice to unlicensed businesses and to those with unpaid admission tax, B&O tax, communications tax, gambling tax and electricity business and solid waste collection monies, among others.
Danielle Larson, the city’s tax and license division manager, said Tuesday that her office was compiling a full list of businesses in arrears, including overall penalties, interest and fees owed. The list should be prepared by next week, she said.
Full details of the program will be forthcoming with a media campaign aimed at informing delinquent businesses.
The stick: enforcement. The carrot: amnesty.
Upon full payment of tax and license fees, late filing penalties and interest will now be waived, according to the ordinance. Upon payment of 50 percent of civil penalties due on tax and license fees, the remaining 50 percent will be waived unless those accounts have been sent to collection. For larger amounts, the city will offer a time-payment plan.
The media campaign may be the key if the program is to succeed.
In Spokane, it didn’t.
“It wasn’t terribly successful,” said Margaret Redd, a city tax and license specialist. “We didn’t have a lot of people come in. I don’t think we really got the word out.”
Elsewhere, amnesty looks to be successful.
Tim Shay, support services manager in Monterey Park, California, said this week that amnesty works.
“It was successful,” he said. “However, after the program, businesses were upset that they didn’t hear about the amnesty.”
The idea for the Tacoma initiative came from Council member Marty Campbell.
“We asked our departments to shake the couch cushions,” he said. “Before we go out with a hammer, let’s go out there with a carrot. Let’s give businesses a chance to make good.”
He emphasized that amnesty will be given for accrued interest and penalties, and that the underlying fees will still be collected.
“As it was presented, I think it’s a good thing,” said Council member Joe Lonergan.
“We’ve identified an issue and we’re taking steps,” he said. “I’m confident this is going to be a good program.”
“I think it makes sense,” said Council member Ryan Mello. “I think it’s a win. I think it’s revenue the city wouldn’t otherwise have.”
Mello noted the likelihood that businesses were unaware that they owed money and “aren’t doing it to evade that. I think they just didn’t know. This is a way for them to come clean. I think folks by and large want to do the right thing.”