Rhode Island & Illinois 2026 Tax Amnesty Programs: Deadlines, Eligibility, and Penalty Relief

Rhode Island and Illinois have each announced tax amnesty programs that may benefit eligible taxpayers. For businesses evaluating historical state tax obligations, these programs provide another opportunity to review outstanding exposure and determine whether action is warranted.

State tax amnesty programs can serve an important role in a broader compliance strategy. They create a limited window for eligible taxpayers to address unresolved liabilities while potentially reducing some of the penalties and interest that can accumulate over time. For organizations operating across multiple states, those opportunities are often worth evaluating carefully when they arise.

2026–2027 Amnesty Windows: Rhode Island and Illinois

Rhode Island. Rhode Island recently enacted legislation requiring the Department of Revenue, Division of Taxation to establish a tax amnesty program that will run from Dec. 3, 2026, through Feb. 15, 2027. The program is expected to be available to eligible taxpayers with outstanding liabilities for taxable periods ending on or before Dec. 31, 2025. According to the Department, participating taxpayers may qualify for a waiver of penalties and a 25 percent reduction in interest upon payment of the tax due. The program is expected to apply to a range of taxes including personal income tax, excise taxes such as sales and use taxes, and corporate income tax.

Illinois. Illinois is currently accepting applications for its Remote Retailer Amnesty Program, which began Aug. 1, 2026, and will continue through Oct. 31, 2026. The program is aimed at out of state remote retailers with unpaid Illinois sales tax liabilities for reporting periods between Jan. 1, 2021, and June 30, 2026, provided they meet the applicable tax remittance threshold. In addition to potential relief from penalties and interest, the program is intended to help qualifying businesses come into compliance through a simplified application process and streamlined tax calculation methods.

AAFCPAs is consistently on the lookout for opportunities that help clients meet state tax requirements efficiently and cost-effectively. For businesses with multistate operations, even relatively small compliance gaps can become difficult to unwind as time passes. Periodic amnesty programs may provide an opportunity to evaluate unresolved state tax issues and determine whether voluntary compliance can be achieved on more favorable terms.

A review may be particularly worthwhile for organizations that have expanded into new states, increased remote sales activity, or identified historical filing obligations that remain unresolved. Because eligibility requirements and potential benefits differ from one program to another, a careful assessment of the underlying facts is an important part of the decision-making process.

Putting This Into Practice: State and Local Tax (SALT)

AAFCPAs’ SALT practice helps businesses navigate the complexities of multistate taxation with practical guidance tailored to their operations, growth plans, and compliance obligations. Our specialists perform nexus analyses, assess filing requirements across jurisdictions, address historical state tax exposure, and help clients evaluate strategies ranging from voluntary disclosure opportunities to ongoing multistate compliance. Whether a business is expanding into new states, managing remote sales activity, responding to state notices, or considering participation in a tax amnesty program, our team works alongside clients to understand the facts, assess potential risks and opportunities, and develop a thoughtful path forward. By combining technical tax insight, technology-enabled compliance solutions, and a collaborative advisory approach, we help clients manage complexity with greater clarity and confidence.

These insights were contributed by Kelly Zack, MST, Partner, State & Local Tax (SALT).

Questions? Reach out to our author directly or your AAFCPAs partner.

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