Heading into 2026, several states are offering tax amnesty programs that can help businesses resolve outstanding liabilities with reduced penalties and interest. These programs provide a valuable opportunity to clean up past obligations and reduce the impact of future tax controversies. Here’s a summary:
New Hampshire Statewide Tax Amnesty
- Amnesty Period: December 1, 2025 through February 15, 2026.
- Taxes Covered: All taxes administered by the NH Department of Revenue, including (among others), the Business Enterprise Tax, Business Profits Tax, Interest & Dividends Tax, Meals & Rooms Tax, and Communications Services Tax.
- Eligibility Period: Applicable to tax liabilities that accrued on or before June 30, 2025.
- Benefits: Waiver of all penalties and 50% of interest upon full payment during the amnesty window. If a taxpayer still has appeal rights, the Department has noted that those will not be forfeited by paying under amnesty, which is an unusual but taxpayer-friendly policy.
- Taxpayers should note that for amounts still owed on taxes due on or before June 30, 2025 after the amnesty period ends, New Hampshire has stated it “will be limited in its willingness to honor any requests for abatement of penalties and interest for amounts that would have qualified for the amnesty program.” Tax Amnesty Program | NH Department of Revenue Administration.
Illinois Remote Retailer Amnesty
- Amnesty Window: August 1, 2026 through October 31, 2026.
- Taxes Covered: Retailers’ Occupation Tax (Illinois’s version of the sales tax).
- Eligibility Period: Applicable to sales made from January 1, 2021 through June 30, 2026.
- Special Feature: Simplified flat rates of 1.75% for qualifying food, drugs, and medical appliances, and 9% for all other taxable sales.
- Benefits: Waiver of all penalties and interest for payments made by October 31, 2026. Learn more about the pros and cons of this and other Illinois amnesty programs in our prior blog article, “Illinois Brings Back Its Tax Amnesty Programs With A New Remote Retailer Feature.”
- This amnesty coincides with Illinois’ controversial “Leveling the Playing Field” legislation which, despite its name, imposes more onerous requirements on remote retailers compared to in-state retailers. The law has been challenged as unconstitutional for discriminating against interstate commerce, among other things. Participating in the amnesty would likely waive any such arguments available to remote retailers.
Washington State Voluntary Disclosure for International Remote Sellers
- Amnesty Window: February 1, 2026 through May 31, 2026.
- Taxes Covered: B&O Tax; Sales Tax
- Eligibility Period: 1-year lookback for sales tax; 4-year lookback plus current year for B&O Tax.
- Scope: Applicable for international remote sellers only. “International,” for this purpose, means a business that is headquartered outside of the U.S., that does not have any employees working in Washington, and that does not own or lease any real property in Washington.
- Benefits: Reduced lookback period for B&O Tax, reduced lookback period for uncollected sales tax, and waiver of penalties up to 39% (29% late returns penalty, 5% unregistered penalty, and 5% tax assessment penalty).
Additionally, Indiana announced it will be launching an amnesty program some time in 2026 to cover most of the taxes administered by the Department of Revenue, with potential waiver of penalties and interest. See DOR-FY26-Strategic-Spending-Reduction-Plan-Approved-Final.pdf. Details regarding the specific dates or rules for the amnesty have not yet been released.
Benefits of Tax Amnesty Programs
Tax amnesty programs are often a cost-effective way to resolve past liabilities; however, because they are generally available during limited windows only, taxpayers who may be eligible should ensure that they evaluate the costs and benefits of the program in a timely manner. The benefits of amnesty programs can be substantial, and may be the only way for taxpayers to achieve certain types of penalty and interest relief. Taxpayers who may be eligible should identify any unpaid or underpaid state and local taxes for covered periods, and ensure that documentation and records are adequate to calculate liabilities correctly. However, while these programs may provide significant benefits, taxpayers should carefully evaluate the programs to ensure that they are not unknowingly waiving appeal rights or making concessions that could impact future audit periods, and should also consider the financial impact of complying with the amnesty programs’ strict payment deadlines.
Baker McKenzie’s SALT attorneys are experienced in guiding clients through the amnesty process.
Contact the Authors: Ted Bots, Drew Hemmings, Doug Wick, Arya Salehi
