As we practice social distancing during the COVID-19 (“coronavirus”) outbreak, our state and local governments, like the federal government, are working through their response to the outbreak. The most common response by state and local governments has been the extension of filing and payment deadlines, however, some states are responding in other ways such as promising to assist with small business loans or changing the qualifications for unemployment benefits.
Deadline extensions are extremely beneficial to many businesses that may not currently have the human resources required to file such returns, or possibly the funds to pay due to impacted business operations and are a welcome reprieve to those in that situation. Some states, such as Texas, have indicated that they do not plan to extend their filing or payment deadlines as these funds are needed to continue to provide emergency services across the state. While this is a catch-22, many taxpayers appreciate their government’s flexibility in these trying times.
Below is a summary of various state and local actions, which may continue to change and evolve over time as each jurisdiction seeks different remedies and incentives.
Filing and Payment Extensions:
Small businesses whose monthly retail sales during the previous calendar year averaged $62,500 or less may file their monthly sales tax returns for the February, March, and April 2020 reporting periods without paying the state sales tax reported as due, provided it is paid by June 1, 2020. The state will waive late payment penalties through June 1, 2020. Additionally, March 2020 motor vehicle registration and vehicle property tax payment deadlines were extended to April 15, 2020.
The FTB is postponing, until July 15, 2020, the filing and payment deadlines for all individuals and business entities for the following: (1) 2019 tax returns; (2) 2019 tax return payments; (3) 2020 first and second quarter estimate payments; (4) 2020 LLC taxes and fees; and (5) 2020 non-wage withholding payments. The CDTFA has posted on its website an alert in which it advises that it has been able to make it easier for such taxpayers and feepayers to request relief from the imposition of interest and penalties.
San Francisco – Deferred the due date for first quarter estimated tax payments from April 30, 2020 to February 2021, for businesses with up to $10 million in gross receipts. City business licensing fees will also be deferred for three months.
The Governor issued a tax extension to July 15 that was more expansive than the IRS’s. He explained his order goes further because it places “no conditions and no caps on the amount of tax that can be deferred over the 90-day period.” It covers, “all filers, without penalty and without interest.” In addition, estimated tax payments due on or after April 15 can also be filed later.
Certain business tax filings and corresponding payments due on or after March 15, 2020, and before June 1, 2020, are extended at least 30 days. The filing date for the 2019 Connecticut corporation business tax return (Forms CT-1120 and CT-1120CU) is extended to June 15, 2020 and the payment deadline is extended to June 15, 2020. The filing date for the 2019 Connecticut pass-through entity tax return (Form CT-1065/CT-1120 SI) is extended to April 15, 2020 and the payment deadline is extended to June 15, 2020. The filing date for the 2019 Connecticut unrelated business income tax return (Form CT-990T) is extended to June 15, 2020, while the payment deadline is extended until June 15, 2020.
District of Columbia
Effective March 11, 2020, Chief Financial Officer (CFO) may waive penalties and abate interest for failure to timely pay sales and use tax for periods ending on February 29, 2020 or March 31, 2020, provided that all taxes for such periods are paid in full on or before July 20, 2020. The CFO may waive penalties and abate interest for the first installment of real property tax for the 2020 tax year (due on or before March 31) provided the property owner pays the installment by June 20, 2020. The D.C. Office of Tax and Revenue must issue guidance on the definition of a hotel or motel for this purpose.
Offering flexibility in filing deadlines for certain businesses and deferring corporate income tax payments until the end of the fiscal year.
Delays the payment of sales tax (but not the filing of returns) by eating and drinking establishments whose 2019 annual sales tax was less than $75,000. IDOR will automatically waive penalties and interest on late payments of sales tax for March, April and May, if such payments commence as scheduled by IDOR starting on May 20th. Estates with returns and payments due between March 16, 2020 and April 15, 2020 will receive a 30-day extension for filing and payment. An extension of time to pay does not waive or abate statutory interest.
Extending certain filing and payment deadlines to align with the Internal Revenue Service. If taxpayers need additional time, they could request an extension.
The state will follow the IRS’ revised deadlines, extending income tax return filing and payment deadlines from April 15 to July 15.
The state has extended sales, beer excise, and wine excise tax return and payment deadlines for the February 2020 tax period from March 20, 2020 to May 20, 2020.
New Orleans – The city will waive fines, fees, interest, and penalties on sales tax payments for 60 days.
Extended March, April, and May 2020 business-related filing deadlines to June 1, 2020 for sales and use tax, withholding tax, and various excise taxes and fees. No interest or penalty will be due for late income tax payments if Maryland business and individual income taxpayers make 2019 tax payments by July 15, 2020. Maryland is following the relief provided by the federal government’s 90-day extension of the April 15, 2020.
Waiving penalty and interest for the late payment of tax or the late filing of returns due on March 20, 2020. The waiver will be effective for a period of 30 days and is limited to sales, use, and withholding payments and returns due March 20, 2020. Executive Order moves the tax foreclosure deadline from March 31, 2020, to May 29, 2020, or 30 days after the state of emergency declared in Executive Order 2020-04 is terminated, whichever comes first.
Granted a 30-day extension for certain bars, restaurants, and other places of public accommodation to pay their February sales tax, extending the deadline from March 20, 2020 to April 20, 2020.
New Mexico will extend income tax deadlines consistent with the IRS, the Taxation and Revenue Department said Friday, March 20. Taxpayers will now have until July 15 to pay for personal income taxes and corporate income taxes, the department said in a news release. Penalties will not be imposed, but unpaid balances will continue to accrue interest. Employer-paid withholding taxes from employee wages that are due each month from March through June will now be due July 25, according to a news release. Interest will accrue but Governor Lujan Grisham “expressed support for waiving or refunding any interest owed by taxpayers taking advantage of the extensions announced today.” Finally, the department is adding extra staff to speed up income tax refunds.
New York will follow the IRS in waiving penalties and interest for late tax returns and payments filed by July 15, according to its state budget director, at a news conference on Friday, March 20. The state will also waive penalties and interest on sales tax collections due Friday from businesses. The sales tax deadline will stand, but penalties and interest will not be charged if paid by July 15.
Will waive the following penalties: failure to obtain a license; failure to file a return; failure to pay tax when due; and the penalties regarding informational returns. The waiver applies to the failure to timely obtain a license, file a return, or pay a tax that is due between March 15 and March 31, 2020, if the license is obtained, the return or extension application is filed, or the tax is paid by April 15, 2020.
The Department will not assess underpayment penalties on taxpayers making a good faith effort to estimate their first quarter payments that are due April 30, 2020. Oregon will automatically follow federal tax filing extensions.
Tax returns and payments due April 1 – June 1 will now be due June 1, 2020. Penalty and interest will not be charged if payment is made by June 1. This includes Individual Income Taxes, Corporate Income Taxes, Sales and Use Tax, Admissions Tax and other taxes filed and paid with the SCDOR.
Charleston – Will defer the collection of local accommodation and hospitality taxes for 90 days.
Will conform to IRS filing deadlines for individual income tax filings, but the due dates for Utah corporate and pass-through entity filings are set by statute and requires legislative, not administrative, action to change.
Businesses impacted by coronavirus can request filing and payment extensions and penalty waivers related to business tax filings.
Seattle – Deferred business and occupational tax filings for certain small businesses and has closed its public-facing customer service counters for the time being.
Florida – Will supplement federal Small Business Administration loans with a $50 million bridge loan program from the state.
Illinois – Plans to file emergency rules to help individuals unemployed due to COVID-19 qualify for unemployment benefits.
Iowa – Temporarily suspended collections of property taxes.
New York City has postponed a hearing on preliminary reforms to its property tax.
Connecticut Department of Revenue has requested taxpayers not to use walk in services.
Kentucky Department of Revenue and Ohio Department of Taxation have suspended in person services.
Pennsylvania Department of Revenue offices and call centers have closed.
Maryland’s legislative session will end early.
Louisiana has suspended legal deadlines, including liberative prescription and preemptive periods applicable to legal proceedings in all courts, administrative agencies, and boards, until at least Monday, April 13, 2020.
Additionally, this outbreak is impacting litigation as many state courts and administrative bodies have rescheduled hearing dates and interim deadlines to later in the year. If you have any ongoing litigation related to tax or otherwise, we recommend that you discuss any potential deadlines with your attorneys as many have changed over the last few days.
We anticipate that additional extensions, relief, closures, and litigation impacts will be announced as time goes on and especially considering the federal relief packages that were recently announced and those that are currently being debated.