This bill proposes to amend current tax statutes by removing the penalty for late-filing tax returns when the tax amount due is zero. Under current law, taxpayers who fail to file a return on time face a penalty of either 4.5% of the tax due or a minimum of $25, whichever is greater. The proposed changes would insert language that specifies that if the tax required to be shown on the return is zero, the penalty will not apply. Additionally, the bill clarifies that the penalty provisions will still apply to other cases unless the failure to file is due to reasonable cause and not willful neglect.

Furthermore, the bill establishes that these changes will take effect for taxable periods beginning January 1, 2026, and includes a retroactive application clause for periods starting after December 31, 2025. This means that taxpayers who file late with a zero tax due after this date will not incur penalties, effectively updating the current statute to provide relief for those specific cases.

Statutes affected:
Introduced Version: 42-1125