As the battle against the coronavirus (COVID-19) pandemic continues, states and localities are providing taxpayers with some tax relief. The relief measures specific to sales and use tax liability are discussed below.
Alabama. The Alabama Department of Revenue has announced that, effective immediately, it is extending relief to small retail businesses that are unable to timely pay their February, March, and April sales tax liabilities. Specifically, 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. Late payment penalties will be waived for these taxpayers through June 1, 2020. Similar sales tax relief may be available on a case-by-case basis to other businesses significantly impacted by COVID-19 and the preventative measures being taken to limit its spread in Alabama. Taxpayers seeking additional information are advised to visit the Department website’s “COVID-19 Updates” page or call the Sales and Use Tax Division at (334)-242-1490. (Notice, Ala. Dept. of Rev., 03/18/2020; Ala. Commr. Order, Ala. Dept. of Rev., 03/18/2020.)
Effective immediately, the Department has announced that it is extending relief to businesses unable to timely pay their February, March, and April 2020 state sales tax liabilities who are currently registered with the Department as engaging in NAICS Sector 72 -Accommodation and Food Services (NAICS Sector 72) business activities. Businesses included in NAICS Sector 72 are those preparing meals, snacks, and beverages for immediate consumption. NAICS Sector 72 taxpayers filing returns for these reporting periods will receive waivers through June 1, 2020, of late payment penalties for state sales tax liabilities reported on their returns. Similar sales tax relief may be available on a case-by-case basis to other businesses significantly impacted by COVID-19 and the preventative measures being taken to limit its spread in Alabama. (Release, Ala. Dept. of Rev., 03/19/2020; Order of the Commr. of Rev., Ala. Dept. of Rev., 03/19/2020.)
Effective immediately, the Department has announced that it will extend relief to state lodgings tax account holders who are unable to timely pay their February, March, and April 2020 state transient occupancy tax, i.e., lodgings tax, liabilities. Late payment penalties for state lodgings tax liabilities reported for these tax periods will be waived through June 1, 2020. The Department cautions taxpayers that the relief applies only to waive late payment penalties for state lodgings tax liabilities. The Department has not extended the return filing deadlines for state lodgings taxes. State lodging tax filers should timely file all lodgings tax returns as normal and report any taxes due. Similar state sales tax relief may be available on a case-by-case basis to other businesses significantly impacted by COVID-19 and the preventative measures being taken to limit its spread in Alabama. (Release, Ala. Dept. of Rev., 03/20/2020.)
California. Governor Gavin Newsom issued on March 12, 2020, an executive order regarding California’s response to the COVID-19 pandemic. The executive order, which is effective immediately, orders, among other things, that: (1) to quickly provide relief from penalties and interest, the provisions of the Revenue and Taxation Code that apply to the taxes and fees administered by the California Department of Tax and Fee Administration (CDTFA), requiring the filing of a statement under penalty of perjury setting forth the facts for a claim for relief, are suspended for a period of 60 days after the date of the order for any individuals or businesses who are unable to file a timely return or make a timely payment as a result of complying with state or local public health officials imposition or recommendation of social distancing measures related to COVID-19; and (2) the Franchise Tax Board (FTB), the State Board of Equalization (SBE), the CDTFA, and the Office of Tax Appeals (OTA) shall use their administrative powers where appropriate to provide those individuals and businesses impacted by complying with a state or local public health official’s imposition or recommendation of social distancing measures related to COVID-19 with the extensions for filing, payment, audits, billing, notices, assessments, claims for refund, and relief from subsequent penalties and interest. (Executive Order N-25-20, Executive Department, State of California, 03/12/2020.)
During the 60-day window specified in Governor Newsom’s executive order on the COVID-19 pandemic (see previous paragraph), 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. They can go through the CDTFA’s normal online process for requesting relief, they can send a letter (a link to the CDTFA’s office locations and addresses CDTFA’s office locations and addresses is provided), or they can call the CDTFA’s call center at 1 (800) 400-7115. (Alert, California Department of Tax and Fee Administration, 03/12/2020.)
The CDTFA has done the following: (1) created a COVID-19 state of emergency webpage; and (2) added COVID-19 to the list of disasters for which state of emergency tax or fee relief is available. Regarding (1), on March 12, 2020, Governor Newsom issued an Executive Order in response to the COVID-19 State of Emergency. Pursuant to this Executive Order, through May 11, 2020, the CDTFA has the authority to assist individuals and businesses impacted by complying with a state or local public health official’s imposition or recommendation of social distancing measures related to COVID-19. This assistance includes granting extensions for filing returns and making payments, relief from interest and penalties, and filing a claim for refund. Taxpayers may request assistance by contacting the CDTFA through its online services, by sending a letter, by email, or by phone. Regarding (2), the CDTFA’s emergency tax or fee relief is available for business owners and feepayers directly affected by disasters declared as state of emergencies over the past three years, may include extension of tax return due dates, relief of penalty and interest, or replacement copies of records lost due to disasters. An extension of up to three months to file and pay taxes is available in 32 of the programs administered by the CDTFA (including sales and use tax, various fuel taxes, and cigarette and tobacco products taxes) for taxpayers directly affected by COVID-19 who, as a result, cannot meet their filing and payment deadlines. Affected taxpayers may apply online for relief from penalties and interest and request online a filing extension. Business owners and fee payers who need to obtain copies of CDTFA tax records will be able to receive replacements free of charge. (COVID-19 State of Emergency Webpage, California Department of Tax and Fee Administration, 03/13/2020; State of Emergency Tax Relief Webpage, California Department of Tax and Fee Administration, 03/13/2020.)
On March 30, 2020, Governor Newsom signed an executive order, i.e., Executive Order N-40-20, that will provide among other things tax relief for businesses. The executive order allows the California Department of Tax and Fee Administration (CDTFA) to offer a 90-day extension for tax returns and tax payments for all businesses filing a return for less than $1 million in taxes. That means small businesses will have until the end of July to file their first-quarter returns. Additionally, the order extends the statute of limitations to file a claim for refund by 60 days to accommodate tax and fee payers. The order also extends the Office of Administrative Law’s deadlines to review regular department proposed regulations. (Governor Newsom Signs Executive Order Providing Relief to California Small Businesses, 03/30/2020.)
In connection with COVID-19 and in accordance with the executive order issued by Governor Newsom on March 30, 2020, i.e., Executive Order N-40-20, to expand tax relief for small business taxpayers, the California Department of Tax and Fee Administration (CDTFA) has announced that all small businesses will have an additional three months to file returns and pay taxes administered by the CDTFA. Additionally, all businesses will have an extra 60 days to file claims for refund from the CDTFA or to appeal a CDTFA decision to the Office of Tax Appeals (OTA). The CDTFA is providing a 3-month extension for a tax return or tax payment to any businesses filing a return for less than $1 million in tax. For business taxpayers below the $1 million threshold for their current California sales and use tax obligation, their returns for the 1st Quarter 2020 will now be due on July 31, 2020. The same provisions apply to the other tax and fee programs administered by the CDTFA. Qualifying taxpayers are not required to file a request for extension or request relief from penalty or interest. This automatic extension will remain in effect through the reporting of taxes and fees due on or before July 31, 2020. In addition to the 3-month extension of time to file and pay taxes, the Executive Order issued by Governor Newsom also provides business taxpayers with additional time to file claims for refund and appeals to the OTA. Taxpayers looking to make refund claims with the CDTFA during this period will have an additional 60 days to file. Similarly, taxpayers seeking an appeal of a CDTFA tax determination to the OTA will have 60 additional days to file the appropriate request. (California Department of Tax and Fee Administration News Release (NR 20-06), 03/31/2020.)
In connection with the governor’s March 30, 2020 executive order relating to COVID-19 pursuant to which the California Department of Tax and Fee Administration (CDTFA) is providing an automatic 3-month payment and filing extension for all taxpayers who file a return with less than $1 million in tax (see item immediately above), the CDTFA has (1) updated its COVID-19 State of Emergency Webpage, and (2) created an online spreadsheet, COVID-19 Extensions to File and Pay. With regard to (1), the updated webpage provides that effective March 30, 2020, all taxpayers who file a return with less than $1 million will have an additional three months to file their returns between now, i.e., March 30, 2020, and July 31, 2020; that the extension is automatic for taxpayers who qualify for it; that if taxpayers have a liability of $1 million or more, they may request an extension if they are unable to file and pay timely; that such requests will be evaluated on a case-by-case basis; and that taxpayers will be notified if their extension has been approved or denied. The webpage includes instructions on how to request an extension to file a return or prepayment and notes that the executive order also provides: (a) a 60-day extension for taxpayers to file a claim for refund for any refund that must otherwise be filed by July 31, 2020, and (b) through July 31, 2020, a 60-day extension for requesting a tax appeal with the Office of Tax Appeals (OTA). With regard to (2), the spreadsheet shows for the various tax and fee programs administered by the CDTFA, for March 2020, April 2020, and May 2020, the following: the filing period, the original due date, and the extension due date. (COVID-19 State of Emergency Webpage, California Department of Tax and Fee Administration, 04/01/2020; COVID-19 Extensions to File and Pay, California Department of Tax and Fee Administration, 04/01/2020.)
In connection with California Governor Gavin Newsom’s announcement that the state is allowing small businesses to defer payment of sales and use taxes of up to $50,000 for up to 12 months, the California Department of Tax and Fee Administration (CDTFA) has announced that, effective April 2, 2020, small business taxpayers, i.e., those with less than $5 million in taxable annual sales, can take advantage of a 12-month, interest-free, payment plan for up to $50,000 of sales and use tax liability. Under the program, qualifying businesses can enter into payment plans to defer up to $50,000 of sales tax liability over a 12-month period, interest free. For taxpayers choosing to defer their first quarter 2020 liability, for example, up to $50,000 of the obligation would now be paid in 12 monthly installments, with the first payment not due until July 31, 2020. Payment plan requests can be made through the CDTFA’s online services system in the coming months. In a Payment Plan FAQ, the CDTFA advises as follows: (1) regarding the taxes and fees to which this payment program applies – at this point, it is available only for sales and use tax liabilities; (2) regarding how the payment plans work – qualifying sales and use taxpayers with deferred liabilities up to $50,000 will pay their tax due in 12 equal monthly installments; no interest or penalties will be assessed against the liability; and (3) regarding taxpayers who owe more than the $50,000 limit – if a taxpayer owes more than $50,000 and needs a payment plan for the amount over $50,000, the CDTFA will have to have the taxpayer enter into one payment plan and adjust the appropriate amount of interest off toward the end of the 12-month period. (COVID-19 State of Emergency Webpage, California Department of Tax and Fee Administration, 04/02/2020; California Department of Tax and Fee Administration News Release (NR 20-07), 04/03/2020.)
In connection with COVID-19, the California Office of Tax Appeals (OTA) has produced a document, the OTA Deadline Factsheet, whose purpose is to give taxpayers a quick reference guide to the due dates that have been extended due to COVID-19 for appeals originating from the Franchise Tax Board (FTB) and the California Department of Tax and Fee Administration (CDTFA) (appeals from the latter include sales and use tax appeals). For appeals originating from each, the reference guide shows (1) the document type, i.e., initial appeal, correspondence to be filed with OTA, and petition for rehearing; (2) the original deadline; and (3) the extended deadline. (OTA Deadline Factsheet, California Office of Tax Appeals, 04/01/2020.)
Colorado. Governor Jared Polis signed Executive Order D 2020 023, effective immediately and expiring May 5, 2020 unless extended, ordering an extension from April 20, 2020 to May 20, 2020 for retailers to file and remit state and state-administered local sales tax. The governor’s order states that this is a one-time extension of the April 20, 2020 filing and remittance deadline. However, those retailers that do not file a return and remit full payment on or before April 20, 2020 will forfeit their 4% vendor/service fee and any vendor fees that apply to state-administered sales taxes. Governor Polis also directed the Colorado Department of Revenue to: (1) promulgate and issue emergency rules to extend the deadline; (2) waive penalties and interest that would otherwise accrue during the extension period; and (3) through another order, coordinate with local governments that choose to extend sales and use tax payment deadlines, taking any required actions to allow penalties to be waived. The Department of Revenue announced the extension and waiver on April 6, 2020 and clarified that the extension does not apply to self-collecting home-rule jurisdictions. (Executive Order D 2020 023, Governor’s Office, State of Colorado, 04/05/2020; Website Post: Sales Tax Deadline Extension Due to COVID-19, Colo. Dept. Rev., 04/06/2020; Executive Order D 2020 010, Executive Department, State of Colorado, 03/20/2020.)
On April 7, 2020, the Colorado Department of Revenue adopted emergency rule Colo. Code Regs. § 39-26-105-5, Special Extension of Time for Filing Returns and Paying Taxes Due April 20, 2020, to comply with Governor Polis’s Executive Order D 2020 023. Since the original April 15, 2020 deadline will pass before permanent rules can be promulgated, the emergency rules are necessary and will be published in the Colorado Register on May 10, 2020. (Website Post: April 2020 Sales Tax Deadline Extension, Emergency Rule Adoption, Colo. Dept. Rev., 04/07/2020.)
Connecticut. Effective March 30, 2020, the Connecticut Department of Revenue Services (DRS) has revised its COVID-19 guidance to allow sales and use tax and room occupancy tax return filing and payment extensions for small business taxpayers only. Small business taxpayers that have $150,000 or less in annual sales tax liability qualify for an automatic extension of time to file and pay. Similarly, taxpayers that have $150,000 or less in annual room occupancy tax also qualify for this relief. A taxpayer that collects both sales tax and room occupancy tax must evaluate each tax separately to determine eligibility for relief. To determine if they qualify for the extensions, taxpayers must utilize a calendar year look back period of January 1, 2019, through December 31, 2019. Any taxpayer that reported $150,000 or less in tax during that period qualifies for the relief. For monthly sales tax and room occupancy tax filers, returns and payments due March 31, 2020, and April 30, 2020, are extended until May 31, 2020. For quarterly filers, returns and payments due April 30, 2020, are extended to May, 31, 2020. Taxpayers who file and pay on or before the extended deadlines will not be subject to any penalties or interest. DRS will not return payments of taxes due March 31, 2020 that have already been made. (Connecticut COVID-19 Frequently Asked Questions (updated through March 30, 2020), 03/30/2020.)
District of Columbia. L. 2020, Act 23-247, effective 03/17/2020 (expires 06/15/2020), enacts the “COVID-19 Response Emergency Amendment Act of 2020.” The emergency legislation, enacted to address the COVID-19 pandemic, provides that the 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 waiver does not apply to hotels or motels that are permitted to defer property tax under another provision of the emergency legislation. Under this provision of the emergency legislation, for property that is commercially improved and occupied and is a hotel or motel, 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 (OTR) must issue guidance on the definition of a hotel or motel for this purpose. The legislation is made applicable as of March 11, 2020.
On March 17, 2020, the District of Columbia enacted the “COVID-19 Response Emergency Amendment Act of 2020” (the Act) which expanded the authority of the OTR to abate interest and waive penalties for failure to timely pay sales and use tax due for periods ending on February 29, 2020 and March 31, 2020, provided certain conditions are met. Consequently, the OTR will automatically waive interest and penalties that would ordinarily be assessed for failure to timely pay sales and use tax due for the periods ending on February 29, 2020 and March 31, 2020. All vendors who are required to file sales and use tax returns on either a monthly or a quarterly basis are eligible for this relief, except for hotels and motels permitted to defer real property taxes under the Act. Any hotel or motel vendor registered with OTR with the NAICS code 72111, 721110, 72112 or 721120 is ineligible for this relief. Monthly filers must file a Form FR-800M as usual through MyTax.DC.gov on or before March 20, 2020 for the period ending February 29, 2020 and on or before April 20, 2020 for the period ending March 31, 2020. Quarterly filers must file a Form FR-800Q as usual through MyTax.DC.gov on or before April 20, 2020 for the period ending March 31, 2020. All eligible vendors must pay in full all sales and use taxes due for periods ending on February 29, 2020 and March 31, 2020 on or before July 20, 2020. Failure to pay in full by July 20, 2020 will result in interest and penalties accruing from the original payment due dates.
Florida. To assist those adversely affected by COVID-19, Department of Revenue Executive Director Jim Zingale has issued Order of Emergency Waiver/Deviation #20-52-DOR-002 to extend certain filing deadlines for the following taxes: sales and use tax, discretionary sales surtax, tourist development tax, new tire fees, rental car surcharges, prepaid wireless E-911 fees, lead acid battery fees, and dry cleaning gross receipts tax. For taxpayers who collected tax during the February reporting period, and were unable to meet the March 20, 2020 due date, the Department will waive the imposition of penalty and accrual of interest, if the taxes are reported and remitted by March 31, 2020. For taxes collected in March and due on or before April 20, 2020, taxpayers who have been adversely affected by COVID-19 have an extended due date of April 30, 2020. Taxpayers who have not been adversely affected by COVID-19 should continue to file and remit taxes no later than the normal due date of April 20. “Adversely affected taxpayer” means: (1) the business closed in compliance with a state or local government order and had no taxable sales transactions as a result; (2) the business experienced sales tax collections in March 2020 that are less than 75% of March 2019 sales tax collections; (3) the business was established after March 2019; or (4) the business is registered with the Department to file quarterly. Taxpayers who fall within the definition of “adversely affected” but who are able to file and pay on time are encouraged to do so. (Order of Emergency Waiver/Deviation No. 20-52-DOR-002, Florida Department of Revenue, 03/26/2020.)
Illinois. The Illinois Department of Revenue issued an informational bulletin to all registered Illinois retailers operating eating and drinking establishments. The Department is waiving all penalties and interest that would have been imposed on sales tax payments for qualified taxpayers. Eligible taxpayers are taxpayers who operate eating and drinking establishments that incurred a total sales tax liability of less than $75,000 in calendar year 2019. Qualified taxpayers will not be charged penalties or interest on late payments for payments that are due in the February, March and April 2020 reporting periods. For most qualified taxpayers, the Department will automatically waive penalties and interest, but if a taxpayer thinks they received a notice from the Department owing interest and penalties, in error, then the taxpayer can respond to the notice with a waiver request. Taxpayers must still file Form ST-1 for each reporting period. Taxpayers must pay their liabilities due in March, April, and May 2020, for liabilities reported on Form ST-1, as follows: 1/4 of the liability for February, March, and April 2020 reporting periods is due May 20, 2020; 1/4 of the liability for February, March, and April 2020 reporting periods is due June 22, 2020; 1/4 of the liability for February, March, and April 2020 reporting periods is due July 20, 2020; and 1/4 of the liability for the February, March, and April 2020 reporting periods is due August 20, 2020. (Illinois Dept. of Rev. Info. Bulletin No. FY 2020-23, 03/01/2020.)
The Department issued an informational bulletin to all organizations and individuals with Illinois Sales Tax Exemption Numbers (E Numbers). As a result of the COVID-19 crisis, the Department is unable to process most renewal applications for E Numbers currently. As a result, the Board of Appeals at the Department has issued an order to extend E Numbers for certificate holders whose certificates expired 60 days prior to the Governor’s “Stay At Home” Order issued on March 21, 2020, and for certificates that expired or will expire within 60 days following this order. The extension is automatic, and updated exemption certificates will not be issued until the Department has processed renewal applications. E Number validity can be verified using MyTax Illinois and questions can be emailed to REV-E99@illinois.gov. (Illinois Dept. of Rev. Info. Bulletin No. FY 2020-25, 03/01/2020.)
The Illinois Department of Revenue issued a news release that due to the COVID-19 crisis it will be ensuring that any alcohol purchases made by Illinois-based distillers, to produce hand sanitizer, will be tax exempt. Generally, distillers incur tax liability based on the amount of alcohol and strength of alcohol used in distillation; however, alcohol purchases needed to produce hand sanitizer during the COVID-19 outbreak will be tax-exempt. Guidance was sent to distillers on how to claim a tax deduction on alcohol purchases to remove tax liability. (Dept. of Rev. Moves to Assist Distillers Making Hand Sanitizer, Ill. Dept. Rev., 04/08/2020.)
Indiana. The Indiana Department of Revenue announced that manufacturers making donations of medicine, medical supplies or other eligible items to fight the COVID-19 pandemic in Indiana will not incur a use tax obligation for those donations. In addition, groups or organizations making donations of medicine, medical supplies or other goods will not incur a use tax obligation for those donations if sales tax was not paid when receiving the item. Eligible items for the COVID-19 use tax waiver include, but are not limited to: (1) medicine and medical supplies, such as personal protective equipment, ventilators and dialysis machines; (2) food donated to food banks or other charities helping feed those in need because of the COVID-19 crisis; (3) clothing, bedding or personal care products donated to homeless shelters or other charities helping those displaced or in jeopardy because of the COVID-19 crisis; (4) soaps, sanitizers, disinfectants, detergents and other cleaning supplies to medical facilities and charities assisting in certain COVID-19 relief; and (5) building supplies, beds and other materials used to construct and furnish field hospitals or other temporary medical facilities. Companies and organizations must get approval from the Department to use the COVID-19 waiver by emailing COVID19donations@dor.in.gov and providing the following information: (1) name of the donor; (2) the donor’s Tax ID or Federal Employer Identification Number; (3) identification of the donor as the manufacturer or purchaser of the donated items; (4) a list of all items donated, including the cost or purchase price of the items; (5) the organization(s) receiving the listed items; and (6) a confirmation by the receiving organization(s) that the items have been or will be donated, email confirmations are accepted. After reviewing the information, the Department will confirm if the donation has been approved for the waiver. If approved, the donor will not be required to report the use tax on their next sales and use tax return, their income tax return or a consumer use tax return. Eligible donations made prior to March 19, 2020, will be considered; however, donation of such items will not entitle the donor to a refund of any sales or use tax previously paid to the Department or to a vendor. (Indiana DOR Waiving Use Tax on Donated COVID-19 Supplies, Ind. Dept. of Rev., 04/06/2020.)
The Indiana Department of Revenue issued guidance that due to the COVID-19 outbreak, registered retail merchant certificates that have expired or are set to expire in March, April or May due to outstanding tax liabilities have been granted an extension date of June 30, 2020. Note that some certificate holders may have previously received notifications indicating expiration dates prior to the new date. This notice takes the place of any such prior notifications. (DOR Coronavirus Information, Ind. Dept. of Rev., 04/06/2020.)
Louisiana. The Louisiana Department of Revenue is providing filing and payment extension relief for certain taxes due March 20, 2020. The February 2020 sales tax returns and payments and excise tax returns and payments for Wine Shipped Direct to Consumers and the Louisiana State and Parish and Municipal Beer Tax that are due March 20, 2020, are extended to May 20, 2020. This is an automatic extension and no extension request is necessary. The Department will waive delinquency penalties and compromise interest associated with delinquent sales and excise tax remittances provided the return and payment are received by the extended due date of May 20, 2020. The Department also is temporarily suspending collection activity by distraint and sale on delinquent taxpayer accounts. However, delinquency interest and penalties will continue to accrue in accordance with the statutory requirements on unpaid balances. (Louisiana Revenue Information Bulletin No. 20-008, 03/19/2020; News Release, Department of Revenue Extends State Sales Tax Deadline Due to Coronavirus Public Health Emergency, Louisiana Department of Revenue, 03/19/2020.)
Due to the COVID-19 public health emergency, the Department has extended the payment due dates for several state taxes and provided a chart with details on eligible tax types. The following are extended from March 20, 2020, to May 20, 2020: (1) Excise – Automobile Rental (Feb. 2020), R-1329E: Automobile Rental Excise Tax Return; (2) Excise – Beer (Feb. 2020), R-5621: Louisiana State and Parish and Municipal Beer Tax Return; (3) Excise – Wine (Feb. 2020), R-5696L: Louisiana Tax Return for Wines Shipped Direct to Consumers; (4) Sales – Direct Marketer (Feb. 2020), R-1031E: Direct Marketer Sales Tax Return; (5) Sales – Ernest N. Morial Convention Center Tour and Service Contractor (Feb. 2020), R-1030: Ernest N. Morial Convention Center Service Contractor Tax Return/Tour Tax Return; (6) Sales – General (Feb. 2020), R-1029: Louisiana Department of Revenue Sales Tax Return; (7) Sales – Hotel/Motel (Feb. 2020), R-1029HME: Hotel/Motel Sales Tax Return; (8) Sales – New Orleans Exhibition Hall Authority Food and Beverage (Feb. 2020), R-1325: New Orleans Exhibition Hall Authority Additional Hotel Room Occupancy Tax and Food and Beverage Tax Return; (9) Sales – Occupancy (Feb. 2020): R-1029DSE: Louisiana Stadium and Exhibition District; Ernest N. Morial Exhibition Hall Authority; Hotel/Motel Sales Tax Return; and (10) Sales – Online Hotel Forums (Feb. 2020), R-1029DSO: Online Hotel Forums – Louisiana Stadium and Exhibition District and Ernest N. Morial Exhibition Hall Authority Hotel/Motel Sales and R-1029SWO: Online Hotel Forums – Statewide Hotel/Motel Return. (News Release, COVID-19: Louisiana State Tax Filing and Payment Extensions, Louisiana Department of Revenue, 03/27/2020.)
Maryland. The comptroller has extended to June 1, 2020, the filing and/or payment of returns for collections in or gross receipts from February, March, and April 2020 for sales and use taxes. Also, the comptroller has determined that the penalty will be abated on admissions and amusement tax returns and payments for gross receipts from February, March, and April 2020, so long as the returns and payments are submitted by June 1, 2020. Separate returns reflecting each filing period should be filed rather than a combined return. (Maryland Tax Alert 04-01-20, Maryland Comptroller’s Office, 04/03/2020; COVID-19 Tax Relief FAQs, Maryland Comptroller’s Office, 04/02/2020.)
Massachusetts. The Massachusetts Department of Revenue has adopted an emergency regulation amendment to 830 CMR 62C.16.2: (Sales and Use Tax Returns and Payments), that adds a new section (7) which suspends return filing and payment remittance obligations for certain vendors during the COVID-19 State of Emergency declared by the governor. Specifically, the sales and use tax filing and payment schedule for vendors, whose cumulative sales and use tax liability in the 12-month period ending February 29, 2020 is less than $150,000, will be as follows: Returns and payments due during the period beginning March 20, 2020 and ending May 31, 2020, inclusive, will be suspended. All such returns and payments will be due on June 20, 2020. The suspension does not apply to marijuana retailers, marketplace facilitators or vendors selling motor vehicles who have to continue to file returns and make payments.
The Department has adopted an emergency regulation amendment to 830 CMR 64G.1.1 (Room Occupancy Excise) that adds a new subsection (11)(g) which suspends return filing and payment remittance obligations for certain operators during the COVID-19 State of Emergency declared by the governor. Specifically, the filing and payment schedule for operators, whose cumulative liability in the 12-month period ending February 29, 2020 is less than $150,000, will be as follows. Returns and payments due during the period beginning March 20, 2020 and ending May 31, 2020, inclusive, will be suspended. All such returns and payments, including any local option amount will be due on June 20, 2020. The suspension does not apply to intermediaries that must continue to file returns and make payments.
The Department will waive any late-file or late-pay penalties imposed under Mass. Gen. L. Ch. 62C § 33 for returns and payments due during the period March 20, 2020 through May 31, 2020, for the following: (1) vendors with meals tax return and payment obligations pursuant to G.L. c. 62C, § 16 that do not otherwise qualify for relief announced in Emergency Regulation 830 CMR 62C.16.2(7) promulgated by the Department on March 19, 2020 (see above); and (2) operators and intermediaries with room occupancy excise return and payment obligations that do not otherwise qualify for relief announced in Emergency Regulation 830 CMR 64G.1.1(11)(g) promulgated by the Department on March 19, 2020 (see above). Only penalties are being waived; statutory interest will continue to accrue. To be eligible for a penalty waiver, vendors, operators and intermediaries must file their returns and remit payments on or before June 20, 2020. The penalty waiver is limited to the taxpayers and tax periods outlined above. Applications for waiver of penalties for sales tax other than sales tax on meals, or other circumstances not covered above, will be handled on a case-by-case basis based on reasonable cause. (Massachusetts Technical Information Release No. 20-2, 03/19/2020.)
Michigan. Due to the disruptions to the normal business operations of many sales, use, and withholding taxpayers required to file returns and remit tax by the 20th day of each month due to the COVID-19 outbreak, the Department of Treasury is waiving penalty and interest for the late payment of tax or the late filing of the return due on March 20, 2020. The waiver will be effective for a period of 30 days; therefore, any return or payment currently due on March 20, 2020 may be submitted to the Department without penalty or interest through April 20, 2020. The waiver is limited to sales, use, and withholding payments and returns due March 20, 2020. Any payment or return otherwise due after that date will not be eligible for the current waiver. The waiver is not available for accelerated sales, use, or withholding tax filers. Those taxpayers should continue to file returns and remit any tax due as of the original due dates. (Notice: Penalty and Interest Waived for 30 Days for Monthly Sales, Use, and Withholding Tax Returns Due March 20, 2020, Mich. Dept. Treas., 03/17/2020; Treasury: Small Business Taxpayers Provided Tax Assistance, Mich. Dept. Treas., 03/18/2020.)
Minnesota. The Department of Revenue is allowing a sales and use tax grace period for businesses identified in Minnesota Governor Tim Walz’s Executive Order 20-04 for identified businesses as follows: (1) identified businesses with a monthly sales and use tax payment due March 20, 2020 will have until May 20, 2020 to make that payment; (2) identified businesses with a monthly or quarterly sales and use tax payment due April 20, 2020 will have until May 20, 2020 to make that payment (previously, the Department allowed identified businesses with a monthly sales and use tax payment due March 20, 2020, a 30-day extension to make that payment). During this time the Department will not assess penalties or interest. These businesses should still file their returns by the due dates but do not have to make payments until May 20, 2020. There is no grace period to make the Sales and Use Tax payment for April Sales and Use Tax—the payment and the return will remain due on May 20, 2020. Identified businesses can request additional relief from penalty and interest for reasonable cause after April 20 for reasonable cause, including emergency declarations by the president and governor due to COVID-19. Executive Order 20-04, as amended by Executive Order 20-08, provides for the temporary closure of bars, restaurants, and other places of public accommodation. (Bulletin: Sales and Use Tax payment grace period extended to May 20, 2020, Minn. Dept. Rev., 04/09/2020.)
Mississippi. The Commissioner of Revenue has statutory authority to extend all sales-use and local tax levies by only one month without requiring the imposition of interest. At this time, the Department of Revenue has not extended the time to file returns, but the Department is agreeing to delay the imposition of interest and penalties on any unpaid tax balance for the period covered by the presidentially-declared national emergency effective March 15, 2020 until the end of the national emergency. Additionally, the Department’s audit staff is continuing work on open audits and will resolve issues to minimize audit controversies. The Department will abate penalty and interest on any audits closed during the national emergency period and where the taxpayer agrees to settle the audit without appeal and pay the tax due. The Department will also work with taxpayers to extend deadlines for the production of records and will commit to executing extensions where needed. (Mississippi Department of Revenue Response to Requests for Relief, Miss. Dept. Rev., 03/26/2020.)
New York. The Department of Taxation and Finance has issued an Important Notice alerting sales tax filers that the Department is permitted to waive penalty and interest on late sales tax return filings and payments due to COVID-19. Under specified circumstances, such as key employees who were treated or suspected of having COVID-19, or because tax records were not available due to COVID-19, affected filers must file and pay the tax due with 60 days of the due date to obtain the relief. The Department notes, however, that monthly sales tax filers, and participants in the Promptax program for sales and use tax or prepaid sales tax on fuel, are not eligible for the relief. The notice also provides information on how affected taxpayers can obtain the relief. (New York Special Tax Department Notice No. N-20-1, 03/01/2020.)
North Carolina. The North Carolina Department of Revenue has issued an important notice announcing the expansion of its COVID-19 tax penalty relief from March 15, 2020 through July 15, 2020 for the sales and use tax penalties for failing to obtain a license, to file a return, or to pay taxes, if the corresponding license is obtained, the return is filed, or the tax is paid on or before July 15, 2020. Taxpayers do not need to request a penalty waiver to qualify for this relief. However, if a taxpayer receives a proposed assessment of a penalty covered by the relief granted in this notice, the taxpayer should contact the Department by phone, at 1-877-252-3052, or by writing to the Department at the following address: North Carolina Department of Revenue, Customer Service, P.O. Box 1168, Raleigh, NC 27602. Previously, the Department’s COVID-19 penalty relief was for certain taxpayers with returns or payments due between March 15, 2020 and March 31, 2020, that provided a new due date of April 15, 2020. (Important Notice: Department of Revenue Expands Penalty Relief for Taxpayers Affected by Coronavirus Disease 2019 (COVID-19), N.C. Dept. of Rev., 03/31/2020.)
Pennsylvania. The Pennsylvania Department of Revenue is waiving penalties for businesses that are required to make Accelerated Sales Tax (AST) prepayments by the deadline of Friday, March 20 to assist businesses as Pennsylvania responds to the COVID-19 outbreak. The Department is also waiving the AST prepayment requirement for April sales tax payments, and asking businesses to simply remit the sales tax that they have collected in March. (Waiver of Penalties on Accelerated Sales Tax Prepayments, Pa. Dept. of Rev., 03/19/2020.)
South Carolina. The South Carolina Department of Revenue (DOR) has announced that due to COVID-19, taxes administered by the DOR or tax returns filed with the DOR other than income taxes, that are due between April 1, 2020 and June 1, 2020, are now due on June 1, 2020, without taxpayers incurring penalties or interest. This includes state sales and use taxes, local sales and use taxes collected by the DOR, accommodation taxes, beer, wine and liquor taxes, and motor fuel user fees. (South Carolina South Carolina Information Letter No. 20-3, 03/17/2020; South Carolina Information Letter No. 20-4, 03/23/2020.)
Texas. The comptroller has provided an extension of up to 90 days past the original due date to pay the motor vehicle tax. Late penalties will be assessed as if the last day of the extension is the original due date. However, the extension does not apply to seller-financed motor vehicle sales, as the tax is reported and paid directly to the Comptroller’s Office instead of a county tax assessor-collector upon registration. (COVID-19 News, Texas Comptroller of Public Accounts, 03/31/2020.)
For businesses struggling to pay the full amount of sales taxes they collected in February 2020, the agency is offering assistance in the form of short-term payment agreements and, in most instances, waivers of penalties and interest. The comptroller has setup an Enforcement Hotline at (800) 252-8880 to learn about options for remaining in compliance and avoiding interest and late fees on taxes due. The comptroller strongly encourages taxpayers to use online tools, tutorials, and other resources for tax services, and establish 24/7 account access on Webfile. (COVID-19 News, Texas Comptroller of Public Accounts, 03/31/2020.)
The comptroller is temporarily suspending the 60-day deadline for businesses to contest audit results. This applies to both redetermination and refund hearings. Interest accrued during this period will be waived, and businesses will be notified to reestablish a request deadline at a later date. However, if taxpayers are able to request redetermination during the 60-day deadline, the Comptroller’s Office can handle these requests. In addition, for payment options, taxpayers can call Randy Pitts at (800) 531-5441, ext. 3-3963. (COVID-19 News, Texas Comptroller of Public Accounts, 03/31/2020.)
The comptroller has offered COVID-19 tax relief in the form of postponements on deadlines to remit payments related to existing payment plan agreements. The comptroller will consider postponements on a case-by-case basis. Postponement will only apply to existing payment plan agreements for periods prior to the February 2020 tax report. The potential postponements will not extend or delay a taxpayer’s due dates for remitting or reporting tax collected by taxpayers on behalf of state and local governments. It also will not apply to resolution agreements that specify a deadline to make a single lump-sum payment of the entire liability. The total amount due under the payment plan agreement will not be reduced. After the expiration of the postponement period, all payment deadlines will resume on the next periodic payment deadline as provided in the payment plan agreement. Postponed payments will be added to the end of the term of the agreement. The comptroller’s Enforcement Division can be contacted for qualification and more information at (800) 252-8880. (COVID-19 News, Texas Comptroller of Public Accounts, 03/31/2020.)
Vermont. The Vermont Department of Taxes (DOT) has issued a fact sheet with “Frequently Asked Questions and Answers” on its response to the COVID-19. The DOT announced that until further notice, it will not assess penalties or interest for those businesses that have been affected by the COVID-19 pandemic and cannot meet the March 25, 2020, or April 25, 2020, sales and use tax or meals and rooms tax deadlines. The meals and rooms taxes or sales and use taxes are not abated, because by law the Commissioner of Taxes cannot authorize an abatement of a business’s obligation to pay the taxes it has collected from customers. Furthermore, the DOT’s response is not a cancellation of any further collection of these taxes, and the DOT urges businesses to collect the taxes as normal. Lastly, the filing date and tax payment due dates are not moved. Businesses that can file the return and make the tax payment by the original due date should do so. The DOT urges businesses to file a return even if they cannot afford to make a payment, as that will provide important information to the state to determine how to navigate the COVID-19 emergency. (Coronavirus (COVID-19) Update: 2020 Vermont Tax Relief, Frequently Asked Questions, FS-1272, Vt. Dept. of Taxes, 03/25/2020.)
Virginia. The Virginia Department of Taxation issued a bulletin with important information for those affected by the COVID-19 crisis. The Department will consider requests from sales tax dealers for an extension on filing and paying the February 2020 sales tax return, which is due on March 20, 2020. If a request is granted, then the filing and payment will be April 20, 2020, with a waiver of penalties. However, even with an extension, interest will accrue. Dealers should request a waiver using the Department’s secure email system or by writing to the following address: Virginia Tax, Office of Customer Services, P.O. Box 1115, Richmond, VA 23218-1115. (Virginia Tax Bulletin No. 20-3, 03/19/2020.)
Wisconsin. The Wisconsin Department of Revenue has issued a release announcing that small businesses can immediately request an extension until April 30, 2020 to file sales and use tax returns due March 31, 2020 and until June 1, 2020 for sales and use tax returns due April 30, 2020, in response to the COVID-19 pandemic. In addition, the Department will not assess late filing fees or penalties if sales and use tax returns are filed by April 30 or June 1; 12% interest will accrue beginning on the due date, unless the legislature changes the law to allow the Department to waive interest. The Department will lower the interest rate from 18% to 12% on unpaid balances on sales and use tax returns due March 31 and April 30, 2020. Taxpayers are directed to contact DORTOBReturnAdjustment@wisconsin.gov after they receive a bill to request a reduction of the interest rate. Other steps the Department has taken to help challenges faced by small businesses include installment payment plans for amounts reported on returns but unpaid, relaxing collection activities on delinquent amounts due between now and July 15, 2020 (unless suspending the collection activity would compromise the state’s ability to collect the amount due), and delaying the start of most new audits. (News Release: Help for Small Businesses in Response to COVID-19, Wis. Dept. Rev., 03/27/2020.)
The Wisconsin Department of Revenue has issued a proposed guidance document regarding sales and use tax return filing and payment due dates in light of the COVID-19 pandemic. Taxpayers may request a one-month extension to file a sales and use tax return by requesting an extension before the unextended due date of the return through My Tax Account or by emailing DORRegistration@wisconsin.gov The email request must include the taxpayer’s name, address, identification number, and the reporting period for which the extension is requested. However, there is no extension of time to pay sales and use taxes to the Department. Interest will be imposed during the one-month extension period at a rate of 1.0%. (Wisconsin News for Tax Practitioners No. 03/25/2020, 03/25/2020.)
