Most Vermonters will file their taxes or file for extensions by this week’s deadline, but many individuals and businesses won’t — and the taxes they owe the state amount to well over $100 million.
Officials say an effort to publicize the names of the biggest delinquent taxpayers is helping to reduce that figure.
There was a total of $180 million in past due taxes owed by businesses and individuals at the end of fiscal year 2014, last June.
To put that figure in perspective, legislators have been grappling this session with an approximately $110 million budget gap.
Total delinquent taxes vary from year to year. At the end of fiscal 2012, the figure stood at nearly $200 million. Income taxes account for the largest category of overdue taxes, followed by sales and use, withholding, meals and rooms and corporate taxes. Together, these categories add up to more than $150 million in back taxes.
Beginning last January, the state has published a list of the top 100 delinquent individual and business taxpayers. The idea is that people would pay up to avoid having their names turn up on the list.
“We think that it’s had a greater impact than expected. We were expecting about $800,000 in delinquent tax revenue to come in based on our efforts with this collections program. It’s April and we’re at about $1.2 million and still counting,” says Deputy Tax Commissioner Greg Mousley.
That $1.2 million is only a small fraction of the overall amount due, but the total in delinquent taxes is large and the list of those who owe money is long.
Even if all the 100 businesses and 100 individuals on the initial list paid up, it would amount to only $25 million.
"We were expecting about $800,000 in delinquent tax revenue to come in based on our efforts with this collections program. It's April and we're at about $1.2 million and still counting." - Deputy Tax Commissioner Greg Mousley
It appears the threat of being put on the list is greater than the perceived shame of being on it: More than half of the money collected came from those who paid to avoid having their names or businesses appear on the list.
Mousley says that as those on the list pay their delinquent taxes, their names are removed and new names are added.
“We’ve been sending out letters to people beyond the top 100 to make sure that if we come to a new list and we have to put five new individuals on there, that those five individuals have already received all the necessary communications and warnings,”he says.
Mousley says each individual and business on the top-100 lists has already exhausted all appeals and remedies available under Vermont law.
