Indiana tax amnesty program underway with prospect of collecting at least $100M

Inquiries about Indiana’s tax amnesty program are off to a quick start from businesses and individuals with overdue state taxes, according to state officials.

The general public, however, won’t notice much promotion of the effort as the Indiana Department of Revenue is focused on directly notifying delinquent taxpayers about the chance to pay off those bills without penalties.

The amnesty period opened July 15 for those with tax liabilities from before Jan. 1, 2024. They must agree on payment plans no later than Sept. 9.

Early online traffic about eligibility

More than 2,300 people had logged into the Department of Revenue’s online service portal to check on their amnesty eligibility and payment options as of this week, said Emily Wann, the agency’s executive director of operations.

The department is using its Indiana Taxpayer Information Management Engine, or INTIME, as its principal way of processing actions for the amnesty program.

“Our customers can go to INTIME … and actually determine if they’re eligible for amnesty, look up any of their eligible liabilities, learn more information,” Wann told the Indiana Capital Chronicle. “They can make direct payments through INTIME, or they could set up a payment plan.”

Indiana had similar amnesty programs in 2005 and 2015 that allowed those voluntarily pay their tax delinquency to avoid facing civil or criminal penalties, including late-payment fees, interest or collection fees. 

Those who took part in either previous amnesty aren’t eligible for the new period.

Direct contact rather than advertising

The Department of Revenue said it has about $465 million in delinquent taxes on its books. 

It estimates the amnesty period could yield between $65 million and $144 million, while the State Budget Agency has included $124 million of amnesty revenue into its 2027 fiscal year projections.

Those figures add up to collecting between 14% and 31% of the past-due taxes.

Indiana’s 2015 amnesty period collected $188.5 million, which a state report said amounted to 34% of the eligible liabilities.

Department officials decided against any mass marketing endeavors for the tax amnesty program, instead sending notices directly to the individuals and businesses with delinquencies.

So there will be no tax amnesty billboards or television ads, department spokeswoman Megan Kramer said.

“Instead of spending money on trying to get a percentage of people who aren’t actually eligible, we wanted to instead really focus our efforts on those who we know could benefit from this opportunity,” she said.

Where the money collected will go

Legislators directed the Department of Revenue to establish the amnesty period as part of the state budget bill adopted in 2025. That came as they scrambled in response to projections that tax collections would grow less than 1% each year of the state’s two-year budget cycle.

But state government’s financial picture has improved dramatically since then as tax revenue jumped 6.8% over the past year, which helped the state’s cash reserves grow by $1.5 billion to just shy of $4 billion.  

Money collected through the tax amnesty will be directed to the uses for each type of tax as called for under state law, according to the Department of Revenue.

“Many of the taxes such as individual income tax, corporate tax, and sales tax are deposited into the state’s General Fund to then be allocated to Indiana government activities,” the agency’s website said.

During the 2015 amnesty, out-of-state businesses paid about two-thirds — $125.6 million — of the delinquent collections, with 20% — $37.7 million — coming from Indiana individual taxpayers.

Going into this year’s amnesty, about 60% of the eligible past-due taxes are owed by businesses, according to the Department of Revenue. Roughly 60% of the delinquencies are from Indiana taxpayers and 40% are from elsewhere.

State working with collection company

The Department of Revenue isn’t alone in coordinating the amnesty period as contractor United Collection Bureau is handling much of the work contacting eligible taxpayers and taking phone calls about the program.

United Collection will be paid 5.5% of what it collects in amnesty payments — less than the 6.5% it receives from other state tax collections under a contract extension it signed with the state in December.

Wann, the Department of Revenue executive, said while amnesty inquiries had started off quickly, the success of this year’s program won’t be clear until the time period ends in September.

“In 2015 and in 2005, the majority of our volume (came) in in the last two weeks,” she said. “While we don’t want that to happen, that’s the way we’ve seen it happen in the past. So we are bracing ourselves for the last couple weeks.”