Local Politics

N.C. tax-collection effort nets $427M

Posted January 5, 2010 2:02 p.m. EST
Updated January 5, 2010 7:26 p.m. EST

Money

— North Carolina tax officials collected $427.2 million in back taxes from scores of businesses in the last six months, Revenue Secretary Ken Lay said Tuesday.

The state stepped up its collection program last July amid a record deficit. Lawmakers even included projections of $150 million in collections in their revenue estimates as they hammered out a two-year budget.

The Department of Revenue targeted 389 corporations with large outstanding tax bills and negotiated settlements with 236, Lay said. Officials didn't identify the companies, but 104 cases involved franchisers and another 11 involved credit card issuers.

Revenue officials say the names of the companies remain confidential because they participated in the resolution program.

Many of the tax bills resulted from disputes over provisions in the state tax code or because the corporations operated through an array of entities inside and outside of North Carolina that makes it difficult to assess how much the firms owe the state.

"There was a fair amount of money associated with those cases, though we kind of exceeded our wildest dreams in terms of how much was able to come through this initiative," said Linda Millsaps, chief operating officer for the Department of Revenue.

Companies that took part in the effort had the penalties for late payments waived, Lay said.

A few of them even got refunds after tax officials and company lawyers resolved their bills, he said.

"I think it's best for everybody," he said. "As an agency, we want to be easy to do business with, which necessitates being able to sit down and dialog with people."

The companies that didn't settle their tax cases will continue their fights with the state, but Lay said his department will no longer offer amnesty on late fees and penalties once those cases are resolved.