HB467 Summary

• Adds Article 7 to Chapter 29 of Title 40 establishing a state disclosure requirement for reportable tax avoidance transactions, including listed transactions that have potential to reduce state income tax liability.

• Requires taxpayers participating in reportable tax avoidance transactions to disclose the transaction on original and amended state income tax returns for tax years when the transaction is entered into and when tax benefits are claimed.

• Imposes disclosure penalties of $10,000 for individuals and $50,000 for other entities for reportable transactions, and $100,000 for individuals and $200,000 for other entities for listed transactions, with commissioner authority to impose additional penalties up to 10 percent of tax benefits.

• Requires material advisors to file returns identifying and describing reportable tax avoidance transactions and maintain lists of state taxpayers for whom they provided advice, with penalties of $50,000 for failure to disclose and $10,000 per day for failure to produce lists.

• Establishes a 20 percent penalty on reportable tax avoidance transaction understatements, extends the statute of limitations for listed transactions by two years, and authorizes the state to seek injunctions against persons promoting tax shelters and abusive tax transactions.