The North Carolina Department of Revenue and the North Carolina Small Business Commissioners Office have announced the launch of the Small Business Taxpayer Recovery Program, a joint initiative which will offer penalty and fee waivers in addition to payment plans to companies that have fallen behind on sales, personal income withholding, and other trust taxes as a result of the current economic downturn. "Trust taxes" are those paid by a customer or withheld from an employee and held in trust by the business until they are filed and paid, and include motor vehicle lease and rental, sales and use, scrap tire disposal, solid waste disposal, white goods disposal, and withholding. Additionally, franchise tax is included in the program although it is not considered a trust tax. The program is currently available and is scheduled to run through June 2013.
The goal of the program is to reduce the number of non-compliant taxpayers, but also to help businesses get back on their feet. Secretary of Revenue David Hoyle stated, “Small and local businesses are critical to the continued success of North Carolina. We want to give them a chance to get back on track and move forward as the economy recovers.”
In order to qualify for the program, businesses must have 200 or fewer employees and must agree to use the counseling services of the Small Business and Technology Development Center (SBTDC) or the North Carolina Small Business Center Network (SBCN). Small businesses that complete the required counseling and that file and pay all outstanding taxes are eligible for longer-term repayment plans than normal. Another benefit to participating in the program is the waiver of all penalties and collection fees; however, these fees and penalties may be reinstated if program participants fail to file or pay future taxes on time. Also, liens will not be issued for delinquent trust taxes included in the program. Failure to comply with the terms of the agreement will automatically disqualify a small business from the program, and will result in the immediate reinstatement of all penalties and fees and may subject the small business to a tax lien.