Mayor Announces Tax Amnesty Results Far Exceeded Expectations:
$2.1 Million in New Revenue,
Plus Advance Payment of Another $3.3 Million
(DENVER) Mayor John Hickenlooper and Denver’s Department of Revenue announced Tuesday that the City’s first-ever tax amnesty program produced revenue totaling $5.4 million, far exceeding any estimate of what the innovative program would net the City.
For a three-month period that ended August 29, individuals and businesses which came forward and paid past-due sales, use, or occupational privilege taxes were entitled to skip the normal 15% penalty charge and to halve the amount of interest on the late payments.
Mayor Hickenlooper, delighted by the results, emphasized that the Tax Amnesty Program was a grassroots idea initiated by employees in the Revenue Department’s Treasury Division.
“This revenue not only comes at a crucial time in the City’s budgetary situation, but it underscores the fact that creative City employees, like those who came up with this whole program, are the key to solving the budget problems we are facing,” Hickenlooper said. “This is exactly the sort of innovation we must encourage in City government.”
When the program was announced in late May, officials estimated that collections would total between $500,000 and $1 million.
“We were right in that range, at about $600,000,” said Denver Treasurer Steve Hutt, “until the last day of the program, when we got a check for over $1.4 million from a company in California.”
Confidentiality provisions in the Denver tax laws prevent disclosure of the delinquent taxpayer, but Hutt said the money was sales tax due on the sale of telecommunications equipment.
Added Hutt: “That one blockbuster payment was exactly the type we were hoping the Tax Amnesty Program would bring forth: A company not previously on our radar screen, but now newly licensed with us to remit sales and use tax on an on-going basis, on a level playing field with competitors who remit tax to us each month.”
Further enhancing the total deposited into the City’s bank account as a direct result of the Tax Amnesty Program was a one-time pre-payment by a large Denver company of $3.3 million that would likely have come to the City in 2005 from a regularly scheduled audit.
“While that payment might not technically qualify for the requirements of our amnesty program, we are glad to deposit that check too, especially in light of our current budget situation,” said Manager of Revenue Cheryl Cohen-Vader.
Other statistics of note about the now-concluded program:
“While these one-time, non-repeatable revenue gains are wonderful, our economy is still facing considerable challenges,” Hickenlooper said. “If the economy improves by the end of the year, I hope we will be able to reconsider some of the cost-saving sacrifices that City employees are making.”
- Amount spent outside City government to generate the $2.1 million: $295.80, thus generating nearly $7,100 for every $1 spent.
- Collections ranged from $8.12 from a sole-proprietor two-months behind in his occupational privilege tax, to the $3.3 million described above.
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