New York addresses abatement of interest on sales tax remittances, extends court deadlines 

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Eversheds Sutherland (US) LLPOn March 7, 2020, Governor Andrew Cuomo issued Executive Order No. 202, declaring a State disaster emergency in New York in response to the COVID-19 outbreak. Since that date, Gov. Cuomo has issued a series of Executive Orders providing New York taxpayers with some initial relief in response to the COVID-19 health crisis.

Abatement of Interest on Sales and Use Tax Remittances

On March 20, 2020, Gov. Cuomo issued Executive Order No. 202.8 which, among other things, contains a directive expanding the authority of the Commissioner of Taxation and Finance to allow for the abatement of interest for a period of 60 days for taxpayers who are required to file returns and remit sales and use taxes by March 20, 2020, for the sales tax quarterly period that ended February 29, 2020. This grant of authority is in addition to the Commissioner’s statutory authority to abate late filing and payment penalties under Section 1145 of the Tax Law.

The New York State Department of Taxation and Finance responded to Executive Order No. 202.8 by issuing Notice N-20-1 on March 23, 2020. In Notice N-20-1, the Department identified the following examples of situations that may result in the inability to timely file and pay sales and use tax as a result of the COVID-19 virus:
  • taxpayers who were unable to meet tax filing, payment, or other deadlines because key employees were treated or suspected to have COVID-19;
  • taxpayers whose records necessary to meet tax filing, payment, or other deadlines are not available due to the outbreak;
  • taxpayers who have difficulty in meeting tax filing, payment, or other deadlines because of closure orders or similar business disruptions directly resulting from the outbreak; and
  • taxpayers whose tax practitioners were unable to complete work to meet tax filing, payment, and other deadlines on behalf of their clients due to the outbreak.
The Department further advised that in order for interest abatement to apply returns must be filed and the amount of tax due must be paid within 60 days of the due date.
 
Interest abatement relief is not available to the following categories of vendors:
  • vendors who are required to file sales and use tax returns on a monthly basis; and 
  • participants in the Promptax program for sales and use tax or prepaid sales tax on fuel.
In order to obtain interest and penalty abatement for COVID-19 related filing and payment delays, the Department has advised that taxpayers may request relief by visiting the Department’s website at www.tax.ny.gov. From the Department homepage, taxpayers should click on Tax Department response to novel coronavirus (COVID-19) for instructions on how to apply for relief. Currently, the Department’s website requires the submission of the following information to file a request for abatement of interest and penalties:
  • Employer Identification Number
  • Business Name
  • Business Address
Alternatively, taxpayers that receive a penalty notice from the Department for failure to file returns or make payments due March 20, 2020, are advised to follow the instructions on the notice to request abatement of interest and penalties that would otherwise apply.
 

Court Deadlines Extended

In addition, Executive Order No. 202.8 extends the deadlines for the commencement, filing, or service of any legal action, notice, motion, or other process or proceeding from March 20 to April 19, 2020.

Specifically, Executive Order No. 202.8 provides:

In accordance with the directive of the Chief Judge of the State to limit court operations to essential matters during the pendency of the COVID-19 health crisis, any specific time limit for the commencement, filing, or service of any legal action, notice, motion, or other process or proceeding, as prescribed by the procedural laws of the state, including but not limited to the criminal procedure law, the family court act, the civil practice law and rules, the court of claims act, the surrogate’s court procedure act, and the uniform court acts, or by any other statute, local law, ordinance, order, rule, or regulation, or part thereof, is hereby tolled from the date of this executive order until April 19, 2020.

We anticipate the issuance of additional guidance regarding deadlines for matters at the New York State Division of Tax Appeals and the Tax Appeals Tribunal, and the New York City Tax Appeals Tribunal.

Stay tuned for updates on New York State and City tax-related deadlines and relief provisions related to COVID-19.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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