While the federal government has postponed Tax Day from April 15 to July 15, state tax agencies are not consistently following the federal extended due date for a myriad of reasons ranging from cash flow constraints to lacking the authority needed to postpone statutory deadlines. Additionally, many non-essential state and local agency offices are closed, and cannot accept in-person filings or payments.

Here are the top FAQ’s clients are asking:

Are the states following the federal change for state income taxes? 

Some states, such as Illinois, Alabama, Minnesota and Wisconsin have matched the federal move and will delay their state tax payments and filings to July 15.

Some states, including California and Georgia, have not adjusted their due dates and urge taxpayers to the extent possible to continue to file tax returns on time, including payments due.

What other tax filings may be affected and what are states doing?

Monthly sales and use tax payments, excise taxes on lodging and alcohol, as well as employee withholding taxes may also be affected due to the impact of the coronavirus on business operations and state and local mandated closures and stay at home orders.  Here, state responses may provide targeted relief, or relief for small businesses. 

For example, Alabama is providing a waiver for the payment of February, March and April sales tax liabilities for businesses engaged in food service, including those preparing food for immediate consumption.  Michigan is providing a 30-day waiver for monthly sales, use and withholding the late payment of sales and use taxes due in March for taxpayers other than accelerated sales, use or withholding filers.  At this time, no information is available if the 30-day waiver will be extended.  Illinois will waive late payments and penalties for taxpayers operating eating and drinking establishments with annual sales tax liabilities less than $75,000 for the prior calendar year.  Louisiana is also extending the deadline for excise taxes on sales, beer, and wine to May 20, 2020.

Property tax payments may also be affected, particularly those paid at the local, not state level.  The response from counties has been limited, with many without the ability to approve late payments or waive automatic late fees and penalties.

What should we do if we are shut down and unable to submit our returns?

If specific state guidance is not available, taxpayers should determine if they are able to submit payments and document the payment made. A request for extension or penalty waiver or abatement should also be submitted, in accordance with available statutory provisions, or for the lack of negligence and based on reasonable cause.

In summary, it is important for taxpayers to take additional steps now in order to mitigate their risk of interest, or penalties for suffering negative impacts from the coronavirus.  For additional web-based resources available to assist you in monitoring the spread of the coronavirus on a global basis, you may wish to visit the CDC and the World Health Organization.

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