How COVID-19 is impacting sales tax filing
- Mar 24, 2020 | Gail Cole
Businesses are scrambling to stay solvent in the face of closures, quarantines, and social distancing rules created to slow the spread of the new coronavirus pandemic (COVID-19). To help mitigate the effects of these challenges, a growing number of states are offering tax relief.
Sales tax wasn't top of mind for officials at the start of this crisis: At first, relief focused on income tax and other taxes. However, that's starting to change as state and local governments restrict more movements and business operations. Officials across the United States now recognize the precarious situation facing business owners and the need to relieve some of their stress.
At least one local government is deferring sales tax payments to "provide immediate relief" to the business community. And increasingly, states are waiving penalties or automatically extending filing and payment deadlines.
Of course, no two states or communities are taking the same approach. Thus, even the tax relief may add to the stress some companies are experiencing.
We'll update this post as more states adjust their sales tax filing requirements in response to COVID-19.
|State name||Sales tax filing accommodations (updated daily)|
Sales and lodging tax return late payment penalties waived through June 1, 2020, for small retail businesses with monthly retail sales averaging $62,500 or less during the previous calendar year, and taxpayers registered as engaging in NAICS Sector 72 business activities. The relief is automatically extended for businesses that file their February–April 2020 state sales tax returns.
Additional assistance may be available for individuals and businesses that can't file tax returns on time due to COVID-19.
Contact the Alabama Department of Revenue for more details.
|California||The deadline for state tax filing for affected individuals and businesses is delayed by 60 days (until June 15) per Governor Newsom's Executive Order of March 12, 2020.|
|Colorado||Vail has suspended sales tax collections until future notice.|
Filing deadlines and payments for certain annual tax returns (due March 15–June 1, 2020) are extended by at least 30 days. This affects the pass-through entity tax, unrelated business income tax, and corporation business returns. Payment deadlines associated with these returns are extended to June 15, 2020.
Taxpayers may email DRS@po.state.ct.us or call 860-297-5962 (860-297-4911 for the hearing impaired) to discuss their specific situation.
|Florida||The filing and payment due date for taxes collected in February is extended to March 31, 2020. The filing and payment due date for taxes collected in March is extended to April 30, 2020. The extension applies to: sales and use tax; tourist development tax (for counties administered by the DOR); new tire fees; rental car surcharge; prepaid wireless E-911 fee; lead acid battery fees, and dry cleaning gross receipts fees. Taxpayers not adversely affected by COVID-19 must file and pay on or before April 20, 2020.|
|Illinois||The Illinois Department of Revenue is automatically waiving penalties and interest for retailers operating food and drinking establishments that have late sales tax payments due to COVID-19. This short-term relief applies to businesses with less than $75,000 in total sales tax liability in calendar year 2019.|
|Iowa||No late-filing or underpayment penalties will be assessed for qualifying taxpayers who comply with the extended filing and payment deadlines.|
|Louisiana||Affected businesses have until May 20, 2020, to file and pay sales and excise taxes due March 20, 2020. This is an automatic extension.|
|Maryland||Sales and use tax filing deadlines have been extended to June 1, 2020. Interest and penalties will be waived for businesses that file by June 1, 2020.|
Sales tax on meals returns due in March, April, and May are now due June 20, 2020. Penalty and interest will be waived. Applications for waiver of penalties for sales tax other than sales tax on meals will be handled on a case-by-case basis.
Businesses that paid less than $150,000 in sales tax plus meal taxes in the year ending February 29, 2020, will be eligible for sales and meals tax relief.
|Michigan||Any return or payment of sales, use, and withholding tax due March 20, 2020, may be submitted to the Department of Treasury without penalty or interest through April 20, 2020. This is not available for accelerated sales, use, or withholding filers.
The Minnesota Department of Revenue has ordered a 30-day grace period for businesses identified in Emergency Executive Order 20-04.
The department will not assess penalties or interest on sales and use tax payments due March 20, 2020, provided they're remitted by April 20, 2020.
|Montana||The Montana Department of Revenue Collections Bureau is assessing tax filing situations on a case-by-case basis and may allow deferral of payments for up to one month at a time. To be considered, contact the Collections Bureau at least one week prior to a payment due date.|
Quarterly and annual sales tax filers unable to file or pay by March 20, 2020, due to COVID-19 may request a waiver from penalty and interest. This relief is not available for sales tax vendors who file returns monthly or participants in the PrompTax program for sales and use tax or prepaid sales tax on fuel.
Returns must be filed and the amount due must be paid within 60 days of the due date. Visit the New York Department of Taxation and Finance for additional details.
The North Carolina Department of Revenue will waive penalties for taxpayers for the following tax related activities:
|Pennsylvania||The Pennsylvania Department of Revenue is waiving penalties for businesses required to make Accelerated Sales Tax (AST) prepayments by March 20, 2020. The AST prepayment requirement is waived for April sales tax payments: Businesses should simply remit the sales tax they collected in March.|
The Rhode Island Division of Taxation reminds taxpayers they have "the express right to request that penalties by abated where there was no negligence or intentional disregard of the law."
Visit the Rhode Island Division of Taxation for more details.
Tax returns and payments due April 1–June 1 are now due June 1, 2020. Interest and penalties won't be charged if payment is made by June 1 for admissions tax, corporate and individual income taxes, sales and use tax, and other taxes filed and paid with the South Carolina Department of Revenue. The tax relief will be automatically applied for all applicable returns and payments; taxpayers don't need to take additional action.
Charleston has suspended collection of hospitality and accommodations taxes for 90 days.
|Texas||Per the Texas Comptroller, state and local sales tax filing and payment deadlines will not be extended.|
|Vermont||Businesses unable to meet the March 25 and April 25 filing deadlines for meals and room taxes or sales and use taxes will not be charged penalties or interest. See the Vermont Department of Taxes, Coronavirus Update: Information for Taxpayers.|
|Virginia||Businesses may request an extension of the due date for filing and payment of February 20 sales tax returns due March 20. If granted, the Virginia Department of Taxation will waive penalties for returns filed and taxes paid by April 20. Interest will not be waived.|
Upon request, the Washington Department of Revenue will provide extensions for filing and paying sales tax returns (even if the request is after the due date). This applies only to returns due and not already paid during the state of emergency (February 29, 2020, through the end of the state of emergency, yet to be determined):
|Washington, D.C.||Interest and late payment penalties of sales and use taxes will automatically be waived for periods ending February 29 and March 31 for all businesses (except hotels and motels), provided payment is made in full by July 20, 2020.|
Additional tax relief is described in our coronavirus tax relief roundup. For up-to-date global tax news related to the pandemic, read World turns to VAT cuts on coronavirus Covid-19 threat and the VATlive blog.