2026 tax amnesty programs

• Take advantage of limited-time tax amnesties. Guam, Illinois, Indiana, New York, Rhode Island and Washington are offering 2026 tax amnesty or penalty relief programs that allow businesses to clear outstanding tax liabilities while reducing or eliminating penalties or interest. New Orleans is offering a program for city taxes.
• Understand eligibility and deadlines. Each state’s program has specific requirements: Illinois is only offering amnesty to qualifying remote retailers; Indiana is excluding past amnesty participants; and Washington’s penalty relief program is only for businesses affected by services that became taxable in October 2025 under ESSB 5814.
• Consider whether participation is right for your business. Participation windows are strict. Missing deadlines could result in missed opportunities to reduce fees, interest, or penalties.

• Program dates: August 1–October 31, 2026
• Amnesty period: January 1, 2021–June 30, 2026

The Illinois remote retailer tax amnesty program is only for remote retailers with a tax obligation, meaning businesses with no physical presence in Illinois that have sales tax nexus. To participate, remote retailers must meet the required tax remittance threshold and have unpaid sales tax for sales made between January 1, 2021, through June 30, 2026.

There are two different tax remittance thresholds (aka economic nexus thresholds):

• $100,000 or more in annual gross receipts or at least 200 separate transactions from sales of tangible personal property (TPP) to purchasers in Illinois during the four preceding calendar quarters for any calendar quarter ending after January 1, 2021, and on or before December 31, 2025.
• $100,000 or more in annual gross receipts from sales of TPP to purchasers in Illinois during the four preceding calendar quarters for any calendar quarter starting on or after January 1, 2026.

Why participate?

• Simplified reporting and waived penalties and interest

Participating retailers will pay the following simplified tax rates for sales made between January 1, 2021, and June 30, 2026:

• 9% for general merchandise
• 1.75% for sales of items normally subject to a 1% state tax, such as food for offsite consumption, drugs and medical appliances, and prescription and nonprescription medicines

The simplified sales tax rates will simplify reporting, as Illinois sales tax rates vary by jurisdiction and currently range from 6.25% to 11%. Additionally, the Illinois Department of Revenue will waive penalties and interest for businesses that successfully fulfill the terms of the remote retailer tax amnesty program.

Participation could also stave off additional penalties and interest, for it allows remote retailers that may not have the records necessary to determine the location of their selling activities in Illinois to come into compliance.

As of January 1, 2026, the Illinois Department of Revenue requires remote retailers to provide sufficient information to determine the proper location for destination-based sales, which is typically the delivery address. Businesses subject to destination sourcing rules that cannot properly validate the location of their sales when audited may be assessed a 15% tax rate on undetermined tax locations, even for reporting periods prior to January 2026.

The Department of Revenue is unlikely to impose the 15% tax undetermined location tax rate for businesses that participate in the tax amnesty program. However, businesses that don’t apply for amnesty may eventually be assessed the 15% rate if unable to validate the location of their sales during an audit.

See the Illinois Department of Revenue for additional information about the 2026 remote retailer tax amnesty.

• Program dates: July 15–September 9, 2026
• Amnesty period: All periods prior to January 1, 2024

The Indiana tax amnesty 2026 program is for individuals and businesses with outstanding tax liabilities for tax periods ending before January 1, 2024. However, if you participated in Indiana’s 2005 or 2015 tax amnesty programs, you cannot take part in the 2026 tax amnesty.

All Indiana state taxes paid to the Indiana Department of Revenue or Motor Carrier Services are eligible for tax amnesty, provided they’re for tax periods ending prior to January 1, 2024.

Why participate?

• Waiver of related collection fees, interest, and penalties

The Indiana Department of Revenue will waive all related collection fees, interest, and penalties upon successful completion of amnesty. Furthermore, the department will release any related liens once amnesty-eligible liabilities are paid in full.

See the Indiana Department of Revenue Tax Amnesty 2026 webpage for additional information and to check your eligibility status for Tax Amnesty 2026.

Update, October 14, 2026: Indiana’s tax amnesty program has concluded. The state reportedly collected about $78 million from 15,300 taxpayers during their 2026 tax amnesty program. That’s less than expected. The state had about $465 million in delinquent taxes on the books before the amnesty commenced, and the State Budget Agency included $124 million of amnesty revenue in its 2027 fiscal year projections. 

• Program dates: Effective “immediately” through December 31, 2026
• Amnesty period: A liability for sales and use taxes that’s fixed and final on or before September 1, 2026

The New York State Penalty and Interest Discount Program (PAID) is open to qualifying businesses with an active Certificate of Authority and unpaid sales tax bills (not associated with fraud) subject to collection action. Tax bills that still qualify for formal appeals rights are not eligible for PAID. Balances — not bills — due with sales tax returns filed for periods ending August 31, 2026, and November 30, 2026, are not eligible.

Eligible taxpayers should receive a letter from the New York State Department of Taxation and Finance indicating they have qualifying bills. This letter will list each PAID-eligible bill and possible PAID savings on each. The Department reportedly identified and notified all eligible taxpayers in mid-September. The amounts listed on these bills must be paid electronically by December 31, 2026.

Why participate?

• Waiver of 50% of the interest and 100% of the penalties owed on certain unpaid sales tax bills for qualifying taxpayers 

The Penalty and Interest Discount (PAID) program gives sales tax vendors the chance to save 50% of the interest and 100% of the penalty they owe on certain unpaid sales tax bills, if they pay the total reduced amount owed on all PAID-eligible bills by December 31, 2026.

PAID can also help vendors proactively meet the requirements of the upcoming sales tax reregistration program that will begin mid-2027 and last for three years. Participation in the vendor reregistration program is mandatory for taxpayers that receive a vendor reregistration notice. PAID is a bonus for eligible taxpayers with eligible tax liability.

Tax bills that were eligible for PAID are subject to collection action starting January 1, 2027. Any unpaid tax debts will continue to accrue penalty and interest at the full statutory rate.

See the New York State Department of Taxation and Finance pages on the PAID and sales tax reregistration programs. 

• Program dates: December 3, 2026–February 15, 2027 
• Amnesty period: Reporting periods ending on or before December 31, 2025 

The Rhode Island tax amnesty program is open to all taxpayers that are delinquent on any state taxes administered by the Rhode Island Division of Taxation for periods ending on or before December 31, 2025, including sales and use tax. 

To have an amnesty application approved, a taxpayer must file all delinquent taxes and pay the entire amount of tax due, plus 75% of the interest, with the filing of their amnesty application. This must occur prior to February 15, 2027. 

Why participate?

• Waiver of related penalties and reduced interest

For taxpayers who fulfill the terms of the amnesty program, the Division of Taxation will waive all associated penalties and reduce the interest owed by 25%. 

Visit the Division of Taxation for more details.

• Program dates: Applications must be submitted by September 30, 2027.
• Amnesty period: Reporting periods from October 1, 2025, through December 31, 2026.

This penalty relief program is only for businesses with uncollected retail sales tax and unpaid use tax caused by ESSB 5814. Businesses seeking penalty relief must submit an application by September 30, 2027.

Many previously exempt services became subject to Washington sales tax starting October 1, 2025, under ESSB 5814. The Washington State Department of Revenue determined that these tax changes were “challenging for many businesses to understand and follow before the law took effect.” Consequently, it’s offering a temporary program to waive certain penalties for businesses that voluntarily report and pay retail sales and use taxes for these services.

Participating businesses must pay the tax due along with any applicable interest. As its name suggests, the penalty relief program only waives certain penalties.

Why participate?

• Waiver of penalties owed on unpaid retail sales tax on services that became subject to tax under ESSB 5814.

For additional details, visit the Washington Department of Revenue ESSB 5814 Penalty Relief Program webpage.

• Program dates: October 1–December 31, 2026 
• Amnesty period: All tax periods 

The New Orleans Sales Tax Amnesty Program is open to taxpayers currently under audit or in litigation for sales tax matters, which isn’t often the case. Taxpayers that are operating under an installment agreement or have defaulted on an installment agreement are eligible as well.  

Amnesty may also be available to taxpayers that:

• Claimed incorrect credits or deductions on tax returns 
• Failed to file a tax return and pay the tax due 
• Failed to register or file sales or another type of tax, license, or permit 
• Failed to pay for or renew an occupational license permit 
• Have sales tax liens on personal or business property Misrepresented or omitted tax due 
• Underpaid or have an outstanding sales tax balance

Property taxes are not eligible for New Orleans tax amnesty, but the following taxes are:

• Alcoholic beverage gallonage taxes 
• Hotel/motel taxes
• Occupational license taxes
• Parking taxes 
• Sales taxes
• Use taxes
• Various permits 

Why participate?

• Waiver of 100% of related penalties and fees, and 50% of interest 

The City of New Orleans will waive all penalties and negligence fees, and 50% of the interest charged on delinquent balances for taxpayers that fulfill the terms of the amnesty program. 

After the program ends, the New Orleans Bureau of Revenue will resume enhanced efforts to identify nonfilers and collect delinquent taxes.   

Visit the City of New Orleans Department of Finance for more specifics.

• Program dates: October 24–December 31, 2026
• Amnesty period: Certain taxes due on or before October 20, 2026, plus real property taxes for property assessments from 2016 through 2024

Public Law 38-115 authorizes the Guam Department of Revenue and Taxation (DRT) to provide a tax amnesty program. The DRT announced the launch of the program on October 24, 2026.

All taxes administered under Chapter 26 and Chapter 24 of Title 11, Guam Code Annotated, will be eligible for the amnesty program. Chapter 26 is business privilege tax law; Chapter 24 is real property tax. This is the first time Guam will include real property tax in a tax amnesty.

General tax amnesty

Per the DRT announcement via social media sites and news outlets, eligible taxpayers may start the amnesty process at DRT’s Tax Collection Branch, 1240 Army Drive in Barrigada. They must pay the applicable processing fee:

• $50 for individual, non-business income tax taxpayers.
• $150 for business income tax, business privilege tax, and other local tax categories, including sole proprietorships, use tax, and limited gaming.

Taxpayers must complete all other required clearance processes by December 4, 2026. Clearance requires obtaining stamps from five DRT branches:

• Tax Examination Branch, Tax Enforcement Division
• General Business Licensing Branch, Regulatory Division
• Income Tax and Processing Branch, Taxpayer Service Division
• Business Privilege Tax Branch, Taxpayer Service Division
• Tax Collection Branch, Tax Enforcement Division

The DRT advises taxpayers who are required to file delinquent returns to keep stamped copies of returns filed in person. These documents may be needed during the application process.

Though applying for amnesty may need to be initiated in person, off-island taxpayers may initiate the TAP26 process through an authorized representative.

To receive amnesty, participating taxpayers must submit the 2026 tax amnesty program (TAP26) application and pay the remaining tax principal in full by December 31, 2026.

Real property tax amnesty

The process for the real property tax amnesty should also be started at DRT’s Tax Collection Branch in Barrigada. Taxpayers seeking amnesty must pay the applicable processing fee — $50 per parcel of residential property or vacant land, and $150 per parcel of commercial property — whereupon they’ll receive a TAP26RPT program and process guide.

Note that the administration previously extended the full-payment deadline for 2025 property taxes to December 31, 2026, and waived penalties and interest.

For successful participants of the tax amnesty program, the DRT can waive all civil penalties and interest on eligible delinquent taxes. The DRT may also include incentives for early payment and limited installment plans for eligible participants.

Why participate?

• Waiver of eligible interest and penalties

For approved applicants, the Guam Department of Revenue and Taxation is authorized to waive all civil penalties and interest on eligible delinquent taxes.

Tax amnesty programs offer businesses a valuable chance to catch up on past liabilities, but the best way to handle tax penalties is to avoid them entirely. Visit avalara.com to discover how automated tax compliance solutions can simplify your reporting, keep your business audit-ready, and ensure you won’t need to rely on a future amnesty program.