November 3, 2020

Blues Captain Leaves for Sin City: How State Income Taxes Played a Role in Alex Pietrangelo’s Departure

On January 3, 2019, no one could have predicted that the then St. Louis Blues captain, Alex Pietrangelo, would be hoisting the Stanley Cup at the end of the 2019 season. In early January 2019, the Blues were in last place in the NHL, but the team turned their season around with the help of the song “Gloria”. A little over a year later, Blues fans could not imagine Alex Pietrangelo wearing anything but a Blue Note as he headed towards unrestricted free agency. But in October 2020, the former Blues captain inked a seven-year, $61.6 million contract with the Vegas Golden Knights.

NHL Salary Cap Takes a Hit

It is presumed that one of the major sticking points in the Blues negotiation with Pietrangelo was the amount of signing bonuses included in any potential contract. The ongoing pandemic has limited the cash flow of many businesses throughout the world, and the NHL is not immune to that reality. Before the pandemic hit, the NHL salary cap was anticipated to increase substantially for the upcoming season, but the league decided to keep the salary cap flat for the foreseeable future. The flat salary cap put the Blues in a bind when it came to fitting Pietrangelo in under the salary cap for the upcoming season, which further complicated negotiations. In his deal with Vegas, he will receive $35 million of signing bonuses throughout the life of the seven-year contract, which likely has major tax benefits for the former Blue.

State Income Tax Comes into Play

Nevada is one of nine states that does not have any state income tax. Athletes’ are generally subject to a “jock tax” in states and cities in which they work.  The athletes’ salaries are commonly apportioned to various states and cities using the “duty days” method. This jock tax is levied by states and cities on athletes who play or practice while in town. Assuming Pietrangelo becomes a Nevada resident rather than remaining a Missouri resident, the structure of his contract provides major tax benefits. This means that half of Pietrangelo’s games will be allocated to Nevada, a no income tax state. In addition, signing bonuses are exempt from the Duty Day calculation provided certain criteria are met. Instead, signing bonuses are allocated to an athlete’s resident state. In this case, all of the $35 million in signing bonuses will be allocated to Nevada and not be subject to state income taxes. If he had remained a Missouri resident and signed a similar contact with the Blues, Pietrangelo’s signing bonus would result in Missouri state income taxes of roughly $1.9 million.

For professional athletes, tax compliance and planning can be an issue when it comes to filing in the proper tax authorities. The Anders Sports, Arts and Entertainment Group has the knowledge to help athletes with tax compliance and planning. Contact an Anders advisor below to learn more.

All Insights

October 20, 2020

How Real Estate and Construction Contractors Can Avoid Overpaying Sales and Use Tax

Whether you’re a real estate broker and independent contractor or a general or sub-contractor working in construction, sales tax for contractors can be complex and difficult to understand. There are many factors that affect taxability, and real estate and construction contractors may also be subject to exemptions based on the customer and the property’s function. In this time of uncertainty with the COVID-19 pandemic affecting many businesses, sales tax refunds can help recoup over-paid sales tax and put more money in your pocket.

Are contractors exempt from sales tax?

There are many circumstances where exemptions are allowed but understanding sales tax liability for a construction contractor can be a challenge. States generally do not consider contractors to be making taxable sales, but providing tax exempt services. Contractors are typically treated as the final users and consumers of materials and supplies they use on construction contracts and are liable for sales tax on purchases of those materials and supplies used in a contract. However, many states provide special treatment for construction contracts with exempt organizations if the purchases are related to the entities’ exempt functions and activities.

When can an exemption certificate be used?

In both Missouri and Illinois, a contractor’s purchases of tangible personal property can be exempt with a flow-through exemption, provided a contractor is contracting with an exempt organization. The contractor can obtain an exemption certificatefor purchases of tangible personal property and materials used for a specific contract for the exempt entity. In Missouri, a project exemption certificate is typically needed from the exempt entity and provided to the vendor when making such purchases. Not all states allow a flow-through exemption from exempt organizations, and each state’s rules need to be reviewed individually.

In Missouri, contractors are exempt on purchases of tangible personal property for use out-of-state on a construction contract with an entity authorized to issue an exemption certificate under that state’s law. In Illinois, tangible personal property sold to contractors who resell it as tangible personal property can be treated as a purchase for resale.

Are all contracts treated the same?

Determining the structure of the contract can also impact the taxability. A lump-sum contract will generally leave the contractor responsible for the tax on materials. Whereas, with a separated contract or a cost plus contract the sale may be deemed as part property and part sale of service which may be treated differently on the contractor’s sale to their customer.

These are just a few sales tax nuances and opportunities available to contractors. A clear answer to specific questions on a state-by-state basis will need to be determined by reviewing each state’s rules and regulations. Anders has the resources and expertise to quickly help determine opportunities for you.

A sales and use tax refund review can help find overpayments to keep more money in your business’ pocket during this tough time. Anders State and Local Tax advisors have the expertise to pursue these refunds and can do so on a contingent basis. Contact an Anders advisor below for more information on reverse audits.

All Insights

September 29, 2020

What Not-for-Profits Need to Know About Sales and Use Tax

When it comes to not-for-profit organizations, each state may treat them differently from a tax perspective. Some not-for-profit organizations may be nontaxable on their purchases and taxable for their sales, or vice versa. Some states will tax both sales and purchases or treat both as nontaxable. It’s important to know that being exempt from federal income tax does not always translate to being exempt from sales tax. There are many factors that come into play when a not-for-profit organization is paying or collecting sales tax.

WHAT IS SALES TAX AND WHAT DETERMINES IF I OWE?

Sales tax is a tax on the retail sale of tangible personable property and enumerated taxable services. For not-for-profit entities, where they are located, their main activities or functions, and type of entity can determine whether they pay or collect sales tax.

JEOPARDIZING YOUR EXEMPTION

Pursuant to federal law, there are certain activities that can cause an organization to lose its tax exemption. For example, the following activities can endanger exempt status of an organization:

  1. Activity that results in private benefit or inurement to a private shareholder or individual
  2. Lobbying activity, if it constitutes a substantial part of the organization’s overall activities or if it exceeds a predetermined dollar amount
  3. Activities that are illegal or violate fundamental public policy
  4. Failure to comply with annual filing requirements
  5. Any political campaign activity
  6. Unrelated business activity that is substantial when compared to the organization’s exempt function activities

SALES AND USE TAX FOR ILLINOIS NOT-FOR-PROFITS

Purchasing

Under Illinois law, purchases by not-for-profit organizations are generally exempt from sales and use tax in Illinois, but the organization must have and provide their active state exemption certificate. Nevertheless, there are factors that can cause organizations to pay sales and use tax. If the organization is not operating “exclusively for charitable, religious or educational purposes,” it may not be exempt from paying sales tax on purchases.

Pursuant to Ill. Admin. Code 130.2005(n), “exclusively” has not been given its literal interpretation by the Supreme Court regarding not-for-profit organizations. It means that an organization’s primary activity or function must be charitable, religious or educational. Purchases made by the organization must relate to the primary activity or function of the not-for-profit organization to be exempt. If a substantial activity or function of an organization is not operating exclusively, it will not be considered exempt.

Selling

Sales by exclusively charitable, religious and educational organizations are taxable, unless specifically exempt. Tax exempt sales in Illinois for not-for-profits are:

  • Sales to members, students in the case of schools, or patients in the case of qualifying hospitals, of tangible personal property to be used primarily for the purposes of the selling organization
  • Sales that are noncompetitive with businesses; or occasional dinners, socials and similar activities, whether they are open to the public or not.

For a sale to be considered noncompetitive all proceeds must go to the organization, transactions must be handled through the organization’s members, sales cannot be continuous and the main purpose is to make a charitable donation. Only two “occasional” dinners or similar activities may be exempt per calendar year.

SALES AND USE TAX FOR MISSOURI NOT-FOR-PROFITS

Purchasing

Under Missouri law, sales and use taxes are not applicable to sales made to any religious and charitable organizations and institutions provided they are acting within their religious, charitable or educational functions and activities. For not-for-profit civic, social, service or fraternal organizations to be exempt from tax, the net proceeds must be designated for civic or charitable functions or activities. All purchases must be solely in their civic or charitable functions or activities. Not-for-profit organizations must have and provide their active state exemption certificate. Out of state not-for-profit organizations may purchase or sell exempt, as stated above, if their home state exempts such transaction in that state.

Selling

For the most part, the same guidelines for purchasing apply to sales by the not-for-profit organization.

If you have any questions, our State and Local Tax team is here to help. Contact your Anders advisor below to learn more about how any taxes apply to your not-for-profit organization.

All Insights

September 3, 2020

Consumer Use Tax – The “Tax” That Can Bite Dentists Unaware

Read the Dental Arch article written by Robert V. Willeford, Jr., Anders State and Local Tax Director.

Download All Resources

August 14, 2020

Robert Willeford Warns Dentists of Consumer Use Tax in the Dental Arch

Many dentists are aware that dental services are generally exempt from sales tax. But when dentists sell tangible personal property to customers, this can be taxable on the sale to the patient or insurance company. Anders Director + State and Local Tax Robert V. Willeford, Jr., CPA, Esq. discusses the consumer use tax and how it impacts dental practices in the Dental Arch.

In the article, Robert and Anders tax senior Claire E. Rogers, CPA go into detail about what items are taxable and how Missouri and Illinois handle sales and use tax for qualifying items.

Read Consumer Use Tax – The “Tax” That Can Bite Dentists Unaware or learn more about how we help with State and Local Tax.

All Insights

May 22, 2020

Temporary Location Treatment by State for Work From Home Employees During COVID-19

In response to the stay-at-home orders issued by the states, many states are addressing their treatment of the temporary locations of employees throughout the country when it comes to withholding, as well as nexus.  We’ve prepared a list of those treatments below.

Updated 6/25/20

Alabama – State will not consider temporary changes in an employee’s physical location to impose nexus or alter apportionment of income for any business during the periods of telework requirements of the pandemic.

Arkansas – Under current law, an out of state business that conducts operations in Arkansas related to a declared emergency during a disaster response period is exempt from registering, filing, and remitting state and local taxes, including, without limitation:  unemployment insurance; state and local occupational licensing fees and privilege taxes; state & local income tax; and state & local sales and use tax.  Furthermore, an out of state employee is not required to file or pay Arkansas income tax, subject to income tax withholdings, or any other state & local tax or fee.  However, these businesses and employees may still be subject to any ad valorem taxes.  However, Arkansas has not issued guidance on how this law is applied to the COVID-19 pandemic.

District of Columbia – The District will not try to impose corporation tax or unincorporated business franchise tax nexus due to remote workers (including property being located) temporarily working from home inside the District when no nexus existed before the publicly declared emergency.

Georgia – State will not use the temporary relocation of employees due to COVID-19 pandemic to establish Georgia nexus or for exceeding protections of Public Law 86-272 for the employer.  Income earned by employee temporarily working in Georgia will not be considered Georgia income.  Income earned by nonresident employee that normally works in Georgia are considered Georgia wages and income taxes must continue to be withheld.

Illinois – Illinois issued guidance for employers who employ Illinois residents who work from home during the COVID-19 pandemic.  Illinois requires employers to withhold income tax from employees who perform services in Illinois and perform those services in Illinois for more than 30 days.  Those employers who are not registered for withholding in Illinois will need to get registered.  Illinois will waive penalties and interest for out-of-state employers who fail to withhold solely due to the pandemic, but tax must be paid.  Nevertheless, if a state has a reciprocal agreement with Illinois, the withholding requirements don’t apply.  Those states are Iowa, Kentucky, Michigan, and Wisconsin. 

Indiana – Indiana will not try to impose income tax nexus due to remote workers (including property being located) temporarily working from home inside Indiana when no nexus existed before the publicly declared emergency.  These temporary protections will extend for periods where there is an official work-from-home order by the federal, state or local government or order of a physician due to diagnosis.

Iowa – Iowa will not consider the presence of employee(s) working remotely in Iowa solely due to the COVID-19 pandemic, by itself, to constitute nexus for corporate income tax.  Iowa also will not consider non-sales employees in Iowa due to the pandemic enough to lose the protections of Public Law 86-272.  Iowa has also provided guidance on withholding requirements due to the pandemic.  Individual income tax and withholding requirements have not changed due to the pandemic.  Iowa residents are subject to tax on their entire income, wherever it is earned.  Nonresidents who typically work in Iowa, but are temporarily telecommuting in another state, or nonresidents who typically work outside Iowa but are temporarily telecommuting in Iowa, may need to adjust their Iowa apportionments.

Maine – Revenue Services has determined that personal income tax does not apply to a nonresident’s income earned when conducting trade or business in Maine during a disaster period when the income is earned solely from performing services or conducting business during the COVID-19 disaster period at the request of the state, county, city, political subdivision, or a registered business.  This applies to income earned beginning with the date of the governor’s proclamation of a state of emergency on March 15 and runs for until 30 days after the termination of the state of emergency.

Maryland – Regarding interim workplace modes and employee deployment in light of the current health emergency, the agency will not use these temporary measures to impose business nexus to alter business income sourcing or additional withholding requirements on employers.

Guidance issued on teleworking situations on withholding requirements due to COVID-19.  Compensation paid to a nonresident teleworking in Maryland due to COVID-19 is subject to withholding.  However, Maryland has reciprocal exemption agreement with bordering states of Virginia, District of Columbia, West Virginia, and Pennsylvania.

Massachusetts – Employees working remotely temporarily in Massachusetts due to COVID-19 will not establish corporate excise tax nexus solely based on that fact.

State adopted sourcing rules for income tax withholding from employees who telecommute during the COVID-19 pandemic.  If employee was engaged in performing services in state prior to pandemic, employers must source their income withholding to Massachusetts.  If employee is temporarily working in Massachusetts, state will not require withholding from employer if it must withhold income tax from employee in another state.

Employees working remotely temporarily in Massachusetts due to COVID-19 will not establish sales and use tax nexus solely based on that fact.

Minnesota – State will not seek to impose nexus for any business tax solely because an employee is temporarily working from home in Minnesota due to COVID-19.

Mississippi – Mississippi will not use the changes in temporary work locations due to the pandemic to impose income tax nexus or alter apportionment of income.

Missouri – Though the state has not provided guidance on these issues, the City of St Louis has decided to deny refund requests for the days and weeks employees were required to work from home outside the city due to the COVID-19 pandemic.

Nebraska – State has issued FAQs that addressed employers working from a temporary location in or outside Nebraska.  The state has determined no change in withholding is needed for employees telecommuting during the COVID-19 pandemic.

New Jersey – State will not use the temporary relocation of employees due to COVID-19 pandemic to establish New Jersey nexus for the employer.  Income earned during the temporary period of the COVID-19 pandemic will continue to be sourced as determined by the employer’s jurisdiction.

New York – State has stated it is in no position to waive individual income tax liability for nonresident medical workers when in the state for more than two weeks, per New York law.

North Dakota – If an employee is temporarily telecommuting in North Dakota due to COVID-19, income tax nexus will not be asserted on that basis alone.

Ohio – For Ohio municipal income tax purposes, employees who must report to a temporary worksite during the emergency period due to COVID-19, or 30 days thereafter are considered to be working from their principal place of work.  The state has not specifically addressed if that principal place of work was in another state.

Pennsylvania – State will not seek to impose Corporate Net Income Tax nexus solely on the basis of employees temporarily working from home due to COVID-19.  An employee working from home temporarily due to the COVID-19 pandemic, the department will not consider that a change to the sourcing of the employee’s compensation

  • City of Philadelphia – Business income and receipts tax (“BIRT”), as well as the Net Profits Tax deadline for filing and payments has been extended to July 15, 2020.  City will also temporarily waive the nexus threshold for the BIRT when employee works from home solely due to COVID-19 pandemic.  However, if non-resident employees who were previously working in the city of Philadelphia will be deemed as performed within the city.
    • Nonresident employee is not subject to the Wage Tax when the employer requires him or her to work outside of Philadelphia while COVID-19 causes him or her to work from home.

Rhode Island – State has issued emergency regulations and withholding guidance for employers that have employees working remotely in the state due to the pandemic.  Rhode Island will continue to treat income by nonresidents, temporarily working outside the state solely due to the pandemic, as Rhode Island-source income.  However, the state will not require employers located out of state to withhold Rhode Island income taxes on income for employees who are residents of the state but are temporarily working in Rhode Island solely due to the pandemic.  Unless extended, the emergency rules are in effect for 120 days, barring certain events that may happen, such as:  the state of emergency ending; permanent rules are promulgated; or state enters into an agreement with another state that will govern this withholding requirement.

The state has determined that corporate income tax and sales and use tax nexus will not be established solely due to an employee temporarily working in Rhode Island.  Property temporarily located in the state during the state of emergency for telework purposes will not trigger nexus for income tax or sales and use tax, nor will Public Law 86-272 protection be lost due to the employees performing services in Rhode Island during this time.  Furthermore, employees temporarily working in the state due to the pandemic will not change the Rhode Island apportionment percentages.

South Carolina – The state has offered temporary relief regarding nexus being established solely because an employee temporarily works in South Carolina due to COVID-19.  The state will not use the temporary location as a basis for establishing nexus or altering apportionment of income during the COVID-19 relief period of March 13, 2020 to September 30, 2020.

During the aforementioned relief period, withholding requirements are not affected by an employee temporarily working outside South Carolina due to the pandemic.  In addition, an out-of-state business is not subject to South Carolina’s withholding requirement for employees temporarily working in South Carolina due to the pandemic, if the business is currently withholding income taxes on behalf of the other state.

Texas – Under Texas law, an out of state business is not engaged in business in this state if the entity’s physical presence in this state is solely from the entity’s performance of disaster or emergency related work during a disaster response period.

Vermont – A nonresident temporarily living and working in Vermont is required to pay Vermont taxes on the income earned while living and performing in the state, even if they are in the state due to the COVID-19 pandemic.  If a business has remote workers in Vermont only on a temporary basis, they will not be required to change the employee’s withholding state.

After the lockdown, should your employees want to continue to work remotely, many states will impose nexus, requiring you to file tax returns in those jurisdictions. If you have any questions, our State and Local Tax team is here to help. Contact an Anders advisor to learn more about the COVID-19 extensions or assistance in performing a nexus review to determine where you have a filing responsibility. Visit our COVID-19 Resource Center for more news, tools and insights you need to know in these uncertain times.

All Insights

April 23, 2020

Sales and Use Tax Reviews Provide Opportunity for Businesses to Recover Overpaid Taxes

With the COVID-19 pandemic impacting businesses across industries, this is an ideal time to look for other ways to find funds to be able to recover quickly and get business back to normal. One way to do that is through a sales and use tax review to find where the business may be overpaying tax and take the necessary steps to avoid overpaying in the future and to recover past overpayments.

What is a sales and use tax review?

A sales and use tax review can assure your business operations are in compliance, and that you are taking advantage of tax savings opportunities. The review provides companies with a benchmark of their current sales and use tax underpayment and overpayment status, as well as associated planning opportunities. State statutes and interpretations change on a continuous basis causing unexpected liability issues to arise and overpayment opportunities to be overlooked. These reviews help ensure businesses aren’t leaving money on the table when it comes to sales and use tax.

At a state level, Missouri made a recent law change extending the refund statute to 10 years instead of 3 years, making it a fantastic time to recover overpaid taxes from the past decade.

What documentation is needed for a sales and use tax review?

To fully understand a business’s tax payment and liability landscape, a sales and use tax review analyzes the following documentation:

  • Sales and use tax returns and support documentation
  • Capital and fixed asset purchase invoices
  • General expense purchase invoices
  • Chart of accounts
  • Prior state sales and use tax audits
  • Prior refund claim documentation

A sales and use tax review can help find overpayments to keep more money in your business’s pocket during this tough time. Contact an Anders advisor for more information on reverse audits or learn more about Anders State and Local Tax.

All Insights

April 16, 2020

State Tax Deadline Extensions Due to COVID-19

In response to the Federal Government’s deadline extensions for federal income tax filings and payments, many states are now extending deadlines for income, sales/use, property and/or other taxes. Though states are in flux right now and are extending deadlines across the country, below we list out the extensions that have come down in the last few days.

Updated 6/25/2020

Income Tax

Alabama – Composite income tax return filing and payment deadline extended to July 15, 2020.  Also postponed filing and payment for individual and corporate income tax, financial institution excise tax, and business privilege tax to July 15, 2020.  This includes relief for payments of tax on self-employment income and estimated income taxes for 2020.  Interest, penalties, and additions will not accrue until July 16, 2020 for the postponed tax filings and payments.  Waived late payment penalties for transient occupancy taxes for February, March, and April returns through June 1, 2020. 

State will not consider temporary changes in an employee’s physical location to impose nexus or alter apportionment of income for any business during the periods of telework requirements of the pandemic.

Alaska – Corporate income tax and estimated payments due on or after April 15 and before July 15 are extended to July 15, 2020.  This includes partnership income information returns due April 15, 2020.  Tax returns and payments that would typically be due March 31 have been extended to July 15, 2020 for all taxes administered by the Tax Division, except oil and gas production taxes.  All other tax types administered by the Tax Division and Charitable Gaming will have their deadlines extended until July 15, 2020 for returns, reports, and payments due between April 10 and July 14.  Penalties and interest will not be assessed if returns and payments are received by the extended due date.

Arkansas – Individual income tax filings and payments extended to July 15, 2020.  This was clarified to include S Corporations; fiduciary and estates; partnership income; and composite returns.  Upon election, quarterly estimated tax payments can be determined by using the 2019 estimated payment.  A request for penalty waiver can be filed via form on state website for the 2020 return filed in 2021.  Individual income tax will not apply to federal recovery rebate checks.

Under current law, an out of state business that conducts operations in Arkansas related to a declared emergency during a disaster response period is exempt from registering, filing, and remitting state and local taxes, including, without limitation:  unemployment insurance; state and local occupational licensing fees and privilege taxes; state & local income tax; and state & local sales and use tax.  Furthermore, an out of state employee is not required to file or pay Arkansas income tax, subject to income tax withholdings, or any other state & local tax or fee.  However, these businesses and employees may still be subject to any ad valorem taxes.  However, Arkansas has not issued guidance on how this law is applied to the COVID-19 pandemic.

Arizona – Individual, Corporate and Fiduciary state income tax deadline extended to July 15, 2020. Late payment and filing penalties will be suspended until that date.  If taxpayer requests an automatic extension of time to file their federal tax return will get a 6-month extension to file their Arizona returns (5 ½ months for fiduciary return).  This does not provide an additional extension of time to pay their tax liability.

California – Personal income tax and corporate tax filing and payment deadlines postponed to July 15, 2020.  This includes 2020 1st and 2nd quarter estimated tax payments.  LLC taxes and fees and non-wage withholding filing and payments deadline extended to July 15, 2020.  Interest and penalties will be waived.  Certain activities (filing claim for refund, filing appeals or petitions for rehearing) pertaining to income taxes can be delayed till July 15, 2020 if original deadline is between March 12 and July 15. 

Taxpayers with IRC Section 1031 like-kind exchange periods expiring on or after April 1 and before July 15 now have until July 15, 2020 to identify replacement property or complete the exchange.

Economic stimulus payments received from the federal government are no subject to California income tax, nor is the emergency increase of $600 per week in unemployment compensation benefits received under the CARES act.

Colorado – Corporate and Individual income tax filing and payment due date between April 15 and July 15 are extended to July 15, 2020.  This includes income tax on partnerships and estates and trusts.  Also applies to original returns due on April 15 due to a prior extension.  Income tax returns due April 15 automatically extended to October 15, 2020.  Penalties for estimated payments due on or after April 15 through June 15 are waived until July 15, with some exceptions.

Connecticut – Corporate and individual income tax filing and payment deadline extended to July 15, 2020 and applies to estimated tax payments from March 15 through July 15.

Extensions also allowed for certain annual tax returns due on or after March 15, such as corporation business tax, unrelated business income tax, pass-through entity tax (due between March 15 and July 15) and estate and trust income tax (due between April 1 and July 15, 2020). 

Extensions of time to file any notice of assessment or proposed disallowance of a claim for refund on or after January 10, 2020 through May 31, 2020 are allowed an additional 90 days beyond the 60-day filing requirement for all taxes administered by the Department of Revenue Services.  In addition, the 30-day requirement for serving a tax appeal on the Commissioner or Office of the Attorney General has been suspended for appeals to be serviced from March 19, 2020 and after.

Delaware – Corporate, Personal, and Fiduciary income tax filing and payment deadline extended to July 15.  Also applies to tentative and estimated income tax returns and payments.

District of Columbia – Individual and fiduciary income tax filing and payment deadline have been extended to July 15, 2020. Estimated payments not extended.

The District will not try to impose corporation tax or unincorporated business franchise tax nexus due to remote workers (including property being located) temporarily working from home inside the District when no nexus existed before the publicly declared emergency.

The District has also amended income tax law to exempt certain Coronavirus Aid, Relief, and Economic Security Act payments and other grants from tax.

Florida – DOR will offer flexibility on deadlines for income and sales taxes.  Corporate income tax return and payment deadline has been extended to August 3 for returns originally due as follows:

  • May 1, 2020 from corporations with fiscal year of 12/31/2019;
  • June 1, 2020 from corporations with fiscal year of 1/31/2020; and
  • July 1, 2020 from corporations with fiscal year of 2/29/2020.

Tax payments due May 1, 2020 are extended to June 1, 2020.  Other due dates remain as the original due date.  Extension requests and payments due May 1, 2020 are due June 1, 2020.  Estimated tax payments are not extended.

Georgia – Income tax filing and payment deadline after April 15 are extended to July 15, 2020.  Estimated income tax payments due after April 15 and before July 15 have been extended to July 15, 2020.

For refund claims that would have expired from April 15, 2020 to July 15, 2020 are extended to July 15, 2020.  Certain actions required by Department of Revenue during this period have also been extended 30 days.

State will not use the temporary relocation of employees due to COVID-19 pandemic to establish Georgia nexus or for exceeding protections of Public Law 86-272 for the employer.  Income earned by employee temporarily working in Georgia will not be considered Georgia income.  Income earned by nonresident employee that normally works in Georgia are considered Georgia wages and income taxes must continue to be withheld.

Hawaii – Income tax filing and payment deadline for those returns due April 20 through June 20 are extended through July 20, 2020.  This does not apply to estimated income tax payments for nor does it apply to any other tax.

The following forms of relief provided under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act are not subject to Hawaii income tax:

  • Federal Economic Impact Payments; and
  • Loan proceeds from the Paycheck Protection Program (“PPP”) and the Economic Injury Disaster Loan (“EIDL”) program.

Payments under the following programs are subject to income tax:

  • Pandemic Unemployment Assistance (“PUA”); and
  • Federal Pandemic Unemployment Compensation (“FPUC”).

Forgiven PPP loan amounts are currently subject to Hawaii income tax.  However, the Department of Taxation intends to recommend to the Legislature that Hawaii conform to the federal treatment of PPP loan forgiveness.

Idaho – Individual and business income tax filing and payment deadline has been extended to June 15, 2020.  This includes estimated payments normally due April 15.  Penalty and interest will not apply as long as returns are filed and paid by June 15, 2020.  Taxpayers are encouraged to electronically file their returns.

Illinois – Income tax filing and payment deadline for those who file on April 15 are automatically extended to July 15, 2020.  This does not impact the first and second installments of estimated payments for 2020 taxes that are due April 15 and June 15.  However, such installments can be based on 100% of their estimated liability for 2020 or actual liability for 2019 or 2018.  Taxpayers who pay estimated tax in 4 equal installments can pay 90% of their liability for 2020 or 100% of liability for 2019 or 2018 tax years and they will not be assessed underpayment penalties.

Estate return filings and payments due between March 16 and April 15 are granted a 30-day extension.  Interest is not waived.

Indiana – Individual and corporate income tax filing and payment deadlines are extended from April 15 to July 15, 2020.  Corporate tax returns due May 15, June 15, or July 15 will be extended to August 17, 2020.  This includes IT-20, IT-41, IT-65, IT-20S, FIT-20, IT-6WTH and URT-1.   Corporate estimated payments due on April 20, May 20, or June 22 are now due on or before July 15, 2020.  Individual estimated payments originally due on June 15 are now due on or before July 15, 2020. 

Indiana will not try to impose income tax nexus due to remote workers (including property being located) temporarily working from home inside Indiana when no nexus existed before the publicly declared emergency.  These temporary protections will extend for periods where there is an official work-from-home order by the federal, state or local government or order of a physician due to diagnosis.

Refund claims for income tax, withholding tax, and estimated tax set to expire between April 1 and July 14, 2020 is now extended to July 15, 2020.

Iowa – Individual, composite, fiduciary, corporate income tax, franchise tax that are due March 19 through July 31 will be extended and not incur late filing or underpayment penalties until August 1, 2020.  This does not apply to estimated taxes.  Income tax withholding tax deposit due date for certain taxpayers extended for period of March 15 to 25 to a new due date of April 10, 2020.

Iowa also grants conditional penalty relief for individual, corporate, and franchise tax estimated payments under certain conditions.  It applies to installment payments due from April 30 and before July 31.  The conditions are related to gross income and percentage of tax paid.

Personal income taxpayers may elect to have contributions to the Iowa education savings plan trust accounts made before July 31, 2020 apply to the preceding tax year.

Kansas – Individual, corporate, and fiduciary income tax filing and payment deadline, as well as privilege tax deadline shall be extended to July 15, 2020.  Penalties and interest will be waived.  Estimated tax payments for corporate income, financial institution privilege and individual income tax due April 15 will not incur penalties and interest if paid prior to July 15, 2020.

Kentucky – Corporate and individual income tax return and payment deadline of April 15 now extended to July 15, 2020.  The extension covers returns and payments due on April 15, May 15, and June 15 and applies to estimated income tax payments.  Entities included are corporations, S corps, partnerships, LLCs, fiduciaries and individuals.  Will waive late filing and payment penalties, as well as fees and interest will be waived.  If requested by July 15, 2020, automatic extension of seven months from original due date will apply to C Corps, six months from original due date for non-C Corps.

All enforced collection action suspended due to COVID-19 pandemic.  No date established for length of suspension.

Louisiana – Franchise tax and personal and corporate income tax filing and payment deadlines have been extended to July 15, 2020.  Penalties and interest are waived.  For declarations of estimated tax, the state will waive any unpaid estimated tax penalty due for April 15 and June 15, 2020 declaration payments if (a) tax paid and filed timely and payments AND (b) amount paid is at least 90% of prior year’s payment for same payment period.

Pursuant to Senate Bill 498, effective June 4, 2020, if a disaster is declared by the Governor or the U.S. President, the DOR can extend filing deadlines up to six months for income and franchise tax and up to three months for other taxes.  Interest may accrue under a declaration by the Governor, but not by the President.

Maine – State corporate and personal income tax filing and payments deadline is extended from April 15 to July 15, 2020.  This extension includes fiduciary returns (estates and trusts).  The extension includes final and estimated income tax payments for first and second quarter, as well as any estimated or final payments due April 16 through June 15, 2020, for fiscal year filers.  Failure-to-pay penalties and interest is abated through July 15, 2020.  However, since Maine conforms to the Internal Revenue Code through December 31, 2019, those filing their Maine income tax return for 2019 should do so without regard to federal tax provisions enacted after December 31, 2019.

Revenue Services has determined that personal income tax does not apply to a nonresident’s income earned when conducting trade or business in Maine during a disaster period when the income is earned solely from performing services or conducting business during the COVID-19 disaster period at the request of the state, county, city, political subdivision, or a registered business.  This applies to income earned beginning with the date of the governor’s proclamation of a state of emergency on March 15 and runs for until 30 days after the termination of the state of emergency.

Maryland – Individual and business income tax payment deadlines extended to July 15, 2020.  Property income and expense questionnaires are extended from May 15 to July 15, 2020 for income producing real property owners.  Extensions also apply to refund claims.  Extension relief also available to fiscal year filers with tax years ending January 1 thru March 31, 2020.  Estimated income tax payments due for first quarter and second quarter are extended to July 15, 2020.

Regarding interim workplace modes and employee deployment in light of the current health emergency, the agency will not use these temporary measures to impose business nexus to alter business income sourcing or additional withholding requirements on employers.

Massachusetts – Personal income tax return filing and payment deadline are extended from April 15 to July 15, 2020.  The extension is automatic and also applies to fiduciary and partnership composite returns, repatriated income, S Corp and exempt organizations with unrelated business income, as well as estimated personal income tax due April 15 and June 15.  If paid by extended due date, late filing and payment penalties are waived.  Interest is not waived.

Employees working remotely temporarily in Massachusetts due to COVID-19 will not establish corporate excise tax nexus solely based on that fact.

Michigan – Individual, fiduciary, and composite income tax returns and payments due from April 15 through July 15 are extended to July 15, 2020.  Corporate income tax due April 30 to July 31 are extended to July 31, 2020.  Penalties and interest will not accrue until after the extended deadlines.

  • City Income Tax – City income tax returns and payments may also be extended, as indicated by each city.
  • Detroit – The city has extended its income tax return and payment dates in response to the COVID-19 pandemic.  The deadline is extended to July 15, 2020 for returns due April 15 to July 15.  This includes filing and payment of the annual return, application and payment of tax for any extension this return.  It also includes the first and second quarter estimated payments for calendar year filers and any fiscal year estimated payments during the extension period.  Penalties and interest will not accrue during this period.

Minnesota – Individual income tax filing and payment deadline extended to July 15, 2020.  This does not apply to estimated tax payments.  Corporations, Partnerships and Fiduciaries receive an automatic filing extension until the later of November 15, 2020 or date of any federal extension, but no payment extension.

State will not seek to impose nexus for any business tax solely because an employee is temporarily working from home in Minnesota due to COVID-19.

Tax court filings are impacted by the COVID-19 and all appeals from order of the Commissioner of Revenue may only be filed by mail with the date of mailing being the date of filing.  Requests for 30 day extensions of time to appeal may be filed by email to submissions@taxcourt.state.mn.us.  All other documents in cases pending before the court may be filed via same email address and additional paper copies are not necessary.  All trials scheduled before May 18, 2020 are cancelled and will be rescheduled.

Mississippi – Individual, corporate, and fiduciary income tax deadline is extended to July 15, 2020.  This includes the first and second quarter 2020 estimated tax payment and 2019 extension payments.  Penalty and interest will be suspended until the extended due date.  Mississippi will not use the changes in temporary work locations due to the pandemic to impose income tax nexus or alter apportionment of income.

Missouri – Individual, corporate, and trust income tax filing and payment deadlines extended to July 15, 2020.  Estimated tax payments are also extended for April 15 and June 15 payments to July 15, 2020.  Interest and penalties will also be waived through July 15, 2020.  Partnership return (Form MO-1065) filing deadline extended from April 015 to July 15, 2020.

Though not law yet, there is proposed Missouri legislation that would exempt federal coronavirus relief payment from Missouri income tax.  We will update this should it become law.

  • City of St Louis – Earnings tax filing deadline has been extended to July 15, 2020.  This extension is automatic.
  • City of Kansas City – Earnings tax filing deadline has been extended to July 15, 2020.

Montana – Individual income tax filing and payment deadlines extended to July 15, 2020.  Applies to estimated tax payments for 1st quarter of 2020.

To the extent loans under the federal Paycheck Protection Program are forgiven under the CARES Act, the amounts are not included in gross income and thereby are not taxable.  Conversely, business expenses paid with the loan money are not deductible.

Nebraska – Corporate, Individual, and fiduciary income tax filing and payment deadline has been extended to July 15, 2020.  The extension also applies to estimated payments that are due on April 15.

State has issued FAQs that addressed employers working from a temporary location in or outside Nebraska.  The state has determined no change in withholding is needed for employees telecommuting during the COVID-19 pandemic.

New Hampshire – Certain taxpayers are provided filing relief until June 15, 2020 for Business Profits Tax and Business Enterprise Tax owing $50,000 or less for 2018 tax year and Interest & Dividends Tax owing $10,000 or less for 2018 tax year.  For estimated payments, safe harbors are expanded to allow for no penalties under certain circumstances.

New Jersey Individual state income tax, partnership, and corporate business tax filing and payment deadlines will be extended from April 15to July 15, 2020, as announced by Governor Phil Murphy.  This includes 1st quarter estimated tax payments.  Penalties and interest will not be imposed on income tax up to July 15, 2020.  2nd quarter estimated tax payments are still due on June 15.

Original assessment periods are extended additional 90 days after the COVID-19 state of emergency has been lifted.

State will not use the temporary relocation of employees due to COVID-19 pandemic to establish New Jersey nexus for the employer.  Income earned during the temporary period of the COVID-19 pandemic will continue to be sourced as determined by the employer’s jurisdiction.

New Mexico – Corporate and personal income tax returns and payment deadlines have been extended for returns and payments due between April 15 and July 15 to July 15, 2020.  Penalties and interest are waived, but interest still applies to withholding tax extensions.

The Taxation and Revenue Department has announced some modifications to state tax collection efforts as a result of COVID-19.  New Liens, seizures, and injunctions are now on hold through June 30, 2020.  Taxpayers on payment plans will be offered an additional deadline extension of 30 days, for a total of 90 days and are encouraged to make good faith payments.  Taxpayers undergoing audits will be offered the opportunity to request an extension or waiver to provide more records.  The following were also announced:

  1. Automatic garnishment of state tax refunds to pay federal tax debts are suspended;
  2. Additional resources will be devoted to quickly clear identity verification questions on income tax refunds;
  3. Prioritization of review and approval of refund requests, business credits and abatements of taxes due;
  4. Managed audits are offered for potentially noncompliant taxpayers;
  5. Additional staff will be assigned to help resolve tax protests.

New York – Personal income and Corporation tax returns originally due April 15 are extended to July 15, 2020.  Taxpayers are also allowed to defer tax payments without penalties and interest, provided they are filed and paid by July 15.  No extension is allowed for any other state tax or filing any state information return.  However, if personal income tax is administered by the Tax Department and reported on the New York State personal income tax return, those taxes are also extended, such as:  NYC resident tax, Yonkers resident income tax surcharge, etc.

North CarolinaIndividual and corporate income tax filing and payment deadline extended to July 15, 2020, but request for extension must be filed by April 15, 2020 to avoid the penalty.  The filing deadline for filing a request for refund or tax review is also extended to July 15, 2020.  This extension will also apply to franchise tax.  Interest will be waived through the July 15 extension date and will apply to underpayments of estimated corporation and personal income tax due by July 15, 2020.

North Dakota – Individual and corporate income tax return’s filing and payment deadline extended to July 15, 2020.  This applies to all taxpayers that have a filing or payment deadline on or after April 1.  Estimated tax payments due on or after April 1 and before July 15 are extended to July 15, 2020.  Penalties and interest will be waived.

If an employee is temporarily telecommuting in North Dakota due to COVID-19, income tax nexus will not be asserted on that basis alone.

Ohio – State income tax filing and payment deadline has been extended to July 15, 2020.  This applies to Individual income tax; school district income tax; pass-through entity tax; and certain municipal net profit taxes.  Estimated payments for first and second quarter are extended to July 15, 2020.  State has authorized the Tax Commissioner to extend the corporate income and sales and use taxes.

For Ohio municipal income tax purposes, employees who must report to a temporary worksite during the emergency period due to COVID-19, or 30 days thereafter are considered to be working from their principal place of work.  The state has not specifically addressed if that principal place of work was in another state.

Oklahoma – Individual and non-corporate income taxes due between April 15 to July 15 can be deferred up to $1 million without penalties or interest.

Oregon – Corporate and individual income tax filing and payment deadline extended automatically to July 15, 2020.

Pennsylvania – Corporate income tax deadline is extended to August 14, 2020.  Personal income tax deadline has been extended to July 15, 2020.  Penalties and interest will be waived.  Extension applies to declarations and payments of estimated personal income tax for first and second quarters of 2020, as well as informational returns related to S Corps, partnerships, and estates and trusts.  A 3-month extension for certain information returns (1099-R, 1099-MISC, W-2G) is also provided.  Also, non-resident withholding and partnership corporate net income tax withholding due date is extended to July 15.

Payment plans can be suspended temporarily by sending a request via email to RA-RV-CEC-DPP@pa.gov.  New payment plans will offer relief on liens and documentation under certain circumstances.

State will not seek to impose Corporate Net Income Tax nexus solely on the basis of employees temporarily working from home due to COVID-19.  An employee working from home temporarily due to the COVID-19 pandemic, the department will not consider that a change to the sourcing of the employee’s compensation

  • City of Philadelphia – Business income and receipts tax (“BIRT”), as well as the Net Profits Tax deadline for filing and payments has been extended to July 15, 2020.  City will also temporarily waive the nexus threshold for the BIRT when employee works from home solely due to COVID-19 pandemic.  However, if non-resident employees who were previously working in the city of Philadelphia will be deemed as performed within the city.
    • Nonresident employee is not subject to the Wage Tax when the employer requires him or her to work outside of Philadelphia while COVID-19 causes him or her to work from home.

Rhode Island – Corporate and personal income tax deadline has been extended 90 days to July 15, 2020, without penalties and interest.  Corporate and personal income tax estimated payments is also extended to July 15, 2020.

During the state of emergency, services performed by employees who had to work remotely from Rhode Island will not increase their employer’s payroll factor for apportioning income.

Taxpayers unable to make their monthly installments due to COVID-19 may contact the division for options, such as: partial payments or extensions.  Taxpayers unable to fully pay their taxes may apply for an installment agreement.  If taxpayers receive a “Notice of Assessment”, they may request penalty relief.

South Carolina – Individual, corporate and trust income tax, franchise tax, and corporate license fee filing and payment deadlines between April 1 and July 15, 2020 has been extended to July 15, 2020.  This applies to corporations, partnerships, banks, savings and loans, utilities, trusts and estates, and tax-exempt organizations qualify.  This includes quarterly estimated payments due on April 15 and June 15, 2020.  Interest and penalties are waived.

South Carolina announced that economic stimulus payments due to COVID-19 are not subject to the state’s personal income tax.

South Dakota – Bank franchise tax returns due to be filed and paid 15 days after the federal income tax return is due have been extended to July 30, 2020.

Tennessee – Franchise and excise tax filing and payment deadline has been extended to July 15, 2020.  Hall income taxpayers will have until July 15, 2020 to file returns and make payments originally due April 15, 2020.  State and local business tax filing and payment due date is extended to June 15, 2020.  Interest and late filing penalties will not be applied if filed and paid by the extended due date. 

Professional privilege tax filing and payment due date is extended from June 1 to July 1, 2020.  Interest and penalty will not be applied if paid by extended due date.

Texas – Franchise tax reports and payments have been extended to July 15, 2020.  The extension is automatic.  Other extensions can be filed on or before July 15, if needed.

Under Texas law, an out of state business is not engaged in business in this state if the entity’s physical presence in this state is solely from the entity’s performance of disaster or emergency related work during a disaster response period.

Utah – Individual and business income tax deadlines are extended to the later of (a) the 15th day of the fourth month following the close of the taxable year; or (b) the date by which the taxpayer must file and pay for federal income tax purposes.  Late filing and payment penalties and interest will not be imposed if filed and paid by the extended due date.

Virginia – Income tax payments due between April 1 and June 1 can be extended to June 1, 2020.  Penalties will be waived if fully paid by June 1.  Interest will not be waived.  Returns must be filed by original due date.

Vermont Corporate, personal and fiduciary income tax filing and payment deadlines have been extended to July 15, 2020, without any penalty or interest.  This includes estimated tax payments due between April 15 and before July 15, 2020.

West Virginia – Individual, C Corporation, and fiduciary income tax filing and payment deadlines due April 15 will be extended to July 15, 2020.  Extension also applies to estimated income tax payments for individuals, corporations, nonresident S Corp shareholders, partners, or LLC members, and estates and trusts.  Penalties and interest will not begin until July 16, 2020.

COVID-19 rebate checks issued by the federal government are not subject to personal income tax.

Wisconsin – Income tax payments, estimated payments, and returns due on or after April 1 and before July 15 are extended to July 15, 2020.  This includes franchise tax and pass-through withholding tax.

Wisconsin has adopted certain recent amendments made by the federal CARES act, such as:

  • Partial above -the-line deduction for charitable contributions;
  • Suspension of certain limitations on charitable contribution deductions;
  • Exclusion for payroll protection loan forgiveness;
  • Exclusion for certain employer payments of student loans;
  • Special rules on the use of retirement funds.

Sales/Use Tax or Other Tax

Alabama – Motor vehicle registrations and property tax on those vehicles for March, April and May 2020 extended to June 19, 2020.  Penalty will not be charged for these periods until June 22, 2020.

Late payment penalties for February, March, and April 2020 state sales tax liabilities are waived through June 1, 2020 for small businesses whose monthly retail sales for 2019 averaged $62,500 or less.  This waiver also applies to businesses who are registered and engaging in NAICS Sector 72 business activities.  Returns filing deadline has not been extended.

Late payment penalties also waived for state lodgings account holders for February, March, and April 2020.  Returns filing deadline has not been extended.

Arkansas – Though the filing deadline is set by law, late fees and interest charges on annual franchise taxes will be waived until July 15, 2020. 

California – Sales and use tax payments up to $50,000 can be deferred for up to 12 months.  Small business taxpayers, businesses with less than $5M in taxable annual sales, can request a 12-month, interest free, payment plan.  Q1, 2020 sales and use tax returns and payments are now due July 31, 2020.

For taxes administered by the California Department of Tax and Fee Administration (“CDTFA”), there is a three-month extension for returns less than $1M in tax.  Individuals and businesses impacted by COVID-19 may seek filing and payment extensions, relief from interest and penalties, filing claims for refund for all taxes administered by CDTFA.

Employers may request up to a 60-day extension, without penalty and interest to file state payroll reports and/or deposit payroll taxes.

Sales to the state of California of masks, gloves, eye protection, gowns, and other critical equipment designated by Governor’s office with the Health and Human Services Agency are exempt from sales and use tax.  The exemption does not apply to sales of the same items to cities, counties, or other organizations and the exemption is only valid during the state of emergency or until the governor amends or rescinds the executive order.

Business personal property tax statements filing deadline has been extended from May 7, 2020 to May 31, 2020.  Penalty of 10% typically imposed is suspended.  Since May 31 falls on a Sunday, if filed on June 1, 2020, it will be deemed timely filed.

Personal property tax statement filing deadline is extended from May 7, 2020 to May 31, 2020, for the January 1, 2020 lien date.  Since May 31 falls on a Sunday, if filed on June 1, 2020, it will be deemed timely filed.

Penalties, costs, and interest for failure to pay taxes on property before the date and time such taxes became delinquent are suspended until May 6, 2021.  Property tax collector will cancel penalties, costs, and interest provided all the following conditions are satisfied:

  1. Property for which taxes were not paid is either (1) residential real property occupied by the taxpayer; or (2) real property owned and operated by a taxpayer that qualifies as a small business under the SBA’s regulations;
  2. Taxes owed on property in question were not delinquent prior to March 4, 2020;
  3. Taxpayer timely files claim for relief in manner prescribed; and
  4. Taxpayer demonstrates to the of the tax collector that the taxpayer has suffered economic hardship or could not pay due to COVID-19.

Colorado – State severance tax filing and payment due date is extended from April 15 to May 15, 2020.

Retailers that are required to file a sales tax return on April 20 may extend their filing and payment deadline to May 20, 2020.  Penalties and interest will be waived until May 20, 2020.

Motor vehicles tax due date has been extended 90 days from the original due date as a result of COVID-19.

Governor has issued a temporary suspension of 2020 statutory deadlines concerning filing requirements for certain taxable property.  Business personal property, natural resource property, and taxable oil and gas property filing deadline were extended from April 15 to June 15, 2020, along with the statutory deadlines for the following to accommodate the extension:

  1. Notices of valuation to property owners;
  2. Protest period for property valuations;
  3. Notices of determination;
  4. Extended appeal calendar;
  5. Appeals to county boards of equalization;
  6. Preliminary certification of values;
  7. Reports of assessor;
  8. Abstracts of assessment; and
  9. Abstract recommendations.

Connecticut – Taxpayers that have $150,000 or less in annual sales tax liability qualify for an automatic extension of time to file and pay.  This also applies to room occupancy tax, evaluated separately with regards to annual liability.  For monthly and quarterly sales tax and room occupancy tax filers, the returns and payments due March 31 and April 30 are extended to May 31, 2020. 

Deferment program introduced for the period of April 1 through July 1, 2020 for eligible taxpayers for participating municipalities for all taxes and municipal water, sewer and electric charges.

District of Columbia – Abatement of interest and penalties for failure to pay sales/use tax for February and March 2020.  Payments are due in full by July 20, 2020.  Returns must be filed timely. 

Hotels and motels are excluded from the abatement applicable to sales/use tax but allowed to defer payment of real property tax until June 30, 2020.  For real property tax, appeal deadlines have been extended from April 1 to April 30, 2020.  The District has amended property tax law to allow hotels and motels to delay the first two installments on their property tax payments without penalty until June 30, 2020.

Property tax appeals of TY 2021 assessments due on April 1 will now be due April 30, 2020.  District provides an online application for a waiver of penalties and interest on late property tax payments, the first half of real property taxes.

Florida – Property taxes in all Florida counties is extended from March 31 to April 15, 2020 for businesses and taxpayers.  Property tax returns filed by a railroad, railroad terminal, private car and freight line, and equipment company extended to April 15, 2020.

Sales and use tax deadline for taxes collected in March will be extended to April 30, 2020 for businesses affected by COVID-19.  This applies to the following taxes, as well:  tourist development tax; new tire fees; rental car surcharge; prepaid wireless E-9-1-1 fee; lead acid battery fees; and dry-cleaning gross receipts tax.

Disaster preparedness sales tax holiday from May 29, 2020 through June 4, 2020 exempting qualifying items related to disaster preparedness.  The sales tax exemption does not apply to rental or repair of the qualifying items nor sales in a theme park, entertainment complex, public lodging establishment, or airport.

Hawaii – General excise tax (“GET”) does not apply to the following:

  • Unemployment compensation paid to employees; and
  • Loan funds received pursuant to the federal PPP or EIDL programs;

Though grants and payments to replace or supplement income are generally taxable, due to the COVID-19 pandemic, Hawaii will not impose GET on these grants and payments:

  • Payments received under the PUA;
  • Forgiven PPP loan amounts; and
  • EIDL grants.

Idaho – Deadline to apply for property tax deduction, property tax deferrals, and certain disabled veteran benefit program is extended to June 15, 2020.

International Fuel Tax Agreement 1st quarter return and payment deadline has been extended from April 30 to June 1, 2020.  Penalty and interest will not apply to any jurisdiction.

Illinois – Penalty and interest waived on sales tax payments for qualified bars and restaurants, but returns must be filed.  Payments must be made in 4 installments from May 20 to August 20, 2020.

Counties are allowed to waive interest penalties on late 2019 property tax payments due during 2020.  The waiver can be provided for up to 120 days.  Homestead property exemptions can be approved, without application, for senior citizens and disabled citizens, under certain circumstances, provided the county board has declared a COVID-19 public health emergency

Penalty and interest through May 26, 2020 will be waived on IFTA tax returns due April 30.  Taxpayers must simply file their first quarter return by May 26, 2020 in order to be granted the waiver.

  • City of Chicago – Due dates for February, March, and April are extended until July 1, 2020 for the following taxes:  amusement tax, bottled water tax, checkout bag tax, ground transportation tax, hotel accommodation tax, parking tax, and restaurant tax.  No additional interest will accrue on late payments till June 1, 2020.
    • City has also issued restaurant tax guidance on COVID-19 related surcharges.  The rate is 0.50% of the selling price of all food and beverages sold including surcharges, with no deductions for costs or expenses.
  • Exemption numbers – Expiring sales tax exemption certificates within 2020 are extended until December 31, 2020 for those impacted by COVID-19.
  • Lake County – Deferred payment of property taxes without penalties due to COVID-19 pandemic hardship.  50% of June 8 installment due on June 8 and August 7.  50% of second installment due September 8 and November 9.

Indiana – Motor carrier services requirements waived until May 22, 2020.  Motor fuel tax returns filed by IFTA-based licensees with a due date of April 30 may be delayed to May 31, 2020.

Registered Retail Merchant Certificates expiring in March, April or May have been granted an extension date of June 30, 2020.

Business personal property tax returns filing deadline is extended to June 15, 2020.  This extension also applies to property tax incentive application.

Imposition of use tax for the following items are being waived: (1) Manufacturers who make donations of medicine, medical supplies, and other eligible items; and (2) Groups or organizations that make donations of medicine, medical supplies, or other goods.  Approval is required by the DOR via email at COVID19donations@dor.in.gov.  Previously paid tax will not be refunded.

Iowa – The Iowa Small Business Relief Program, announced on March 23, offers small business relief grants and tax deferral of sales and/or withholding taxes due and waiver of penalty and interest and is accepting a second round of applications.  The second round is available for tax periods beginning May 1, 2020 through June 30, 2020.  Only payments are deferred.  Sales and withholding tax returns must be filed timely to qualify for the program.  Each payment is deferred 30 days for this period.  Payments deferred between and including March 20 through April 30 are deferred 60 days.  Penalties and interest will not apply until the applicable deferral period ends.

Penalties and interest are suspended for property tax payments are continued, along with tax sales of property with delinquent taxes and the extension of the right of redemption of after tax sales.

Kansas – Homestead and property tax relief refund claims have been extended to October 15, 2020.

Kentucky – Business personal property tax return filing deadline is extended to July 15, 2020.

Louisiana – Extended due dates for state sales tax returns and payments for February 2020 to May 20, 2020.  Sales tax returns for March and April 2020 are extended to June 30, 2020.  Penalties and interest will be waived if returns and payments received by the due date.

Severance tax returns, payments, and reports filing deadline of April 25 has been extended to June 25, 2020.  No penalties or interest will be assessed before June 25, 2020.

Maine – Property tax exemption application deadlines have been extended to the earlier of the commitment date of the municipality or 30 days after the termination of the declared emergency due to the COVID-19 pandemic.  The April 1, 2020 application deadline for certain Maine current land use property tax applications had previously been extended to July 1, 2020.  That deadline has been extended to the commitment date of the municipality or 30 days after the termination of the emergency, whichever occurs first.

Though sales tax and withholding tax deadlines have not been extended, retailers may request an extension to file their returns, but must remit sales tax to the state, either actual tax collected or estimated tax based on their filing history.  Retailers are still encouraged to timely file their sales tax returns as there is no automatic extension.

Maryland – Sales and use tax payments due in February, March, April, and May are extended to July 15, 2020.  Interest and penalties will be waived.  This applies to sales and use, withholding, admissions and amusement, alcohol, tobacco, and motor fuel tax, tire recycling fees, and bay restoration fees.  Unclaimed property reporting for insurance companies are extended to July 31, 2020.

Guidance issued on teleworking situations on withholding requirements due to COVID-19.  Compensation paid to a nonresident teleworking in Maryland due to COVID-19 is subject to withholding.  However, Maryland has reciprocal exemption agreement with bordering states of Virginia, District of Columbia, West Virginia, and Pennsylvania.

Massachusetts – Waive any late-file or late-pay penalties for tax returns due March 20, 2020 through August 31, 2020 for taxpayers with meals tax obligations and operators and intermediaries with room occupancy tax obligations.  Interest will continue to accrue.  Returns and payments must be filed by September 20, 2020.  Sales and use tax due March 20 through August 31 shall be suspended until September 20, 2020, as well, provided cumulative sales, use, occupancy and/or meals tax liability for March 1, 2019 through February 29, 2020 does not exceed $150,000.  This relief extending due dates do not apply to marijuana retailers, marketplace facilitators, and venders selling motor vehicles.

State adopted sourcing rules for income tax withholding from employees who telecommute during the COVID-19 pandemic.  If employee was engaged in performing services in state prior to pandemic, employers must source their income withholding to Massachusetts.  If employee is temporarily working in Massachusetts, state will not require withholding from employer if it must withhold income tax from employee in another state.

Employees working remotely temporarily in Massachusetts due to COVID-19 will not establish sales and use tax nexus solely based on that fact.

Michigan – Sales, use, and withholding tax on small businesses can be postponed for filing and payment requirements for February, March, April, and May tax periods, as well as Q1 2020.  DOR is waiving penalties and interest for late payment or late filing of any sales, use or withholding tax for these periods until the extended due date.  These returns are now due June 22, 2020.  The Department is now offering an installment option for those filings due on June 22, 2020 without penalty or interest.  Returns must be filed by June 22, 2020.

Property tax foreclosure date extended from March 31 to May 29, 2020 or when state of emergency is terminated.  Property tax appeals at the Tax Tribunal extended to August 31, 2020 if the deadline originally was after May 27 and before September 1, 2020.

Licensing, decal requirements, and trip permit requirements under the Motor Carrier Fuel Tax Act (“MCFTA”) for certain motor carriers are suspended from May 5, 2020 through June 2, 2020.  This also applies to the IFTA credentialing requirements.

  • Detroit – For employer quarterly or monthly withholding originally due April 15, the city has extended the due date to May 15, 2020.  Penalties and interest will not accrue during this period.

Minnesota – 30-day grace period for monthly filers of sales and use tax payments, penalties and interest for payments due March 20, now due April 20, 2020.  Filing date is not extended.

Bars, restaurants, and other places of public accommodation will have a grace period for month sales and use tax payment due March 20 will now have until May 20, 2020 to make the payments.  For monthly or quarterly sales and use tax payment due April 20 have until May 20, 2020 to the payments.  Returns must be filed by original due date.

Lawful Gambling tax extension available upon request for those due on March 20 or April 20 until May 20, 2020.  Request must be made by April 27, 2020 for return due in April.

Property tax petition deadline extended from April 30 to May 30, 2020.

60-day filing extension granted for Minnesota Care returns due March 16, 2020 for certain health providers.  Taxpayers can request relief for penalty and interest for reasonable cause.

Filing of property tax petitions are extended to May 30, 2020.

Department of Revenue issued abatement guidelines for those affected by COVID-19 under certain circumstances, such as:  illness, undue hardship, etc.

State will not seek to impose nexus for any business tax solely because an employee is temporarily working from home in Minnesota due to COVID-19.

Mississippi – Withholding tax payments for the month of April is extended to May 15, 2020.  Though sales and use tax return filing deadlines have not been extended, the state will delay the imposition of interest and penalty on unpaid tax for the period covered by the national emergency.  Property tax renditions are extended for 30 days to May 1, 2020, including the 10% increase in assessment penalty.  Real and personal land rolls can be extended at the discretion of the counties.

Commissioner of Revenue has issued an executive order temporarily suspending the requirements associated with International Registration Plan (“IRP”) and IFTA for any motor vehicle engaged in interstate emergency relief efforts travelling through Mississippi.  The expiration of an apportioned registration under the IRP is extended from April 30 to May 31, 2020.

Nebraska – Penalties for filing a personal property tax return after May 1, 2020 (10%) and July 1, 2020 (25%) is waived for the rest of tax year 2020.  Interest will be assessed on delinquent property tax after July 15, 2020.

New Jersey – Original assessment periods are extended additional 90 days after the COVID-19 state of emergency has been lifted.  Wage income will continue to be sourced as determined by the employer in accordance with the employer’s jurisdiction during the COVID-19 pandemic.

Filing deadline extended for property tax appeals at the county boards operating under the “traditional” assessment calendar from April 1, 2020 (or May 1, 2020 from some municipalities) to July 1, 2020.  These county boards will have until September 30, 2020 to render decisions.  Counties operating under the alternate assessment calendar have not had their filing deadline extended beyond the original deadline.

New Mexico – Withholding returns and payments due between March 20 and July 25 are extended to July 25, 2020.  Penalties are waived, but interest still applies.

New York – Quarterly and Annual sales and use tax returns penalties and interest are waived for those returns due March 20, 2020, with some exceptions.  Returns must be filed and the amount due paid by June 22, 2020.

Property tax executive order to temporarily suspend property tax law, statute, ordinance, order, rule, or regulation that would prevent, hinder, or delay action necessary to cope with the COVID-19 disaster emergency.  The suspension is effective from April 20 to June 20, 2020.  The state extended the time period for the payment of property taxes that were due April 1, 2020 without penalty or interest by 21 days in many municipalities.

  • New York City – Waiver of penalties for business and excise taxes due between March 16 and June 25, 2020.  Taxpayers must request upon filing or in a separate request and mark COVID-19 on first page.  All interest must be paid.  Penalties will also be waived for real property transfer tax returns.

North Carolina – No assessment of penalties for failure to obtain a license, file a return, or pay a tax that is due March 15 through July 15, 2020, if license obtained, return filed, or tax paid on or before July 15, 2020 for the following taxes: 

  • withholding tax;
  • sales and use tax;
  • scrap tire disposal tax;
  • white goods disposal tax;
  • motor vehicle lease and subscription tax;
  • solid waste disposal tax;
  • 911 service charge for prepaid telecom service;
  • dry-cleaning solvent tax;
  • primary forest products tax;
  • freight car line companies; and
  • certain taxes administered by the excise tax division.

Property taxes on motor vehicles that are tied to registration expiration are extended to correspond with extended expiration dates of credentials.  The validity of any credential that expires on or between March 1, 2020 and July 31, 2020 is extended for 5 months.  Individuals receiving such extension will also receive a notice.  Any fines, fees, or penalties will be waived during the extension period.

Oklahoma – In the event the Governor declares a “catastrophic health emergency” and upon the written request of the county treasurer, the board will postpone delinquent personal and real property tax sales and related delinquent notices.  The treasurer will designate a period of postponement of up to one year.

Oregon – Corporate Activity Tax (“CAT”) for individuals may have their interest and penalties waived upon a good faith estimate for first quarter payment due April 30.  Taxpayers expecting more than $10,000 of CAT liability for the calendar year must make estimated payments.  Penalties will not be assessed for underestimated quarterly payments or for not making a quarterly payment, if businesses don’t have the financial ability to make such payment.  Taxpayers should keep documentation showing their inability to pay, reasonably calculate, or the lack of clarity whether the business will owe CAT in April 2020.

Deadlines have been extended due to COVID-19 for the personal income, transit self-employment, estate, partnership, S-Corporation, and corporate excise/income taxpayers and filers and payers.  This includes estate or trusts.  For any returns due on or after April 1 and before July 15 are extended to July 15, 2020.

The deadline for applying for the senior or disabled property tax deferral has been extended to June 15, 2020.  The recertification due date has not changed.

PPP loans, EIDL advances, and Small Business Administration (“SBA”) loan subsidies are not subject to the CAT tax.

Pennsylvania – Accelerated sales tax prepayment requirements are being waived for April, May, and June periods.  Penalties are also being waived for the prepayments for this 3-month period.

Unclaimed property fines, penalties, and interest assessments are granted a 2-month waiver for all late filed reports and property received on or before June 15, 2020.

Payment plans can be suspended temporarily by sending a request via email to RA-RV-CEC-DPP@pa.gov.  New payment plans will offer relief on liens and documentation under certain circumstances.

Taxing districts can now waive late fees and penalties related to property tax deadlines for taxes paid by December 31, 2020.

  • City of Philadelphia – Real estate tax due date for 2020 has been extended from March 31 to June 15, 2020.

Rhode Island – Property tax filing and payment due date has been extended from April 15 to July 15, 2020.  No late charges will apply if filed and paid on or before extended due date.

South Carolina – All taxes other than income tax that are due between April 1 and June 1 will have their deadline extended to June 1, 2020.  This includes state sales and use; local sales and use collected by Department; property tax; withholding tax; motor fuel user fees; and state accommodations tax.

Deadline extended to July 31, 2020 to renew state biennial licenses for coin operated devices and owner/operator licenses and to pay the biennial license tax.  Municipal or county coin-operated device licenses.

Texas – Motor vehicle tax due on purchased vehicles have been extended 90 days past original due date, but it does not apply to seller-financed sales.  Reports and payments of independently procured insurance tax are extended 60 days to July 15, 2020.  Taxpayer must request via email at insurance.tax@cpa.texas.gov.

Virginia – Sales and use tax for February 2020 can be extended to April 20, 2020 upon request by taxpayer.  If granted, penalties will be waived, but interest will not be waived.

Vermont – Sales and use tax and Meals and rooms tax due March 25 and April 25, 2020 that taxpayers are unable to file because of COVID-19 will not incur any interest or penalties until further notice.

The final filing date for the International Fuel Tax Agreement (“IFTA”) first-quarter Vermont motor fuels tax return is extended from April 30 to May 26, 2020.  Interest and penalties will not apply until the expiration of the extension.

Washington – Business and occupation, real estate excise and other tax payments can be extended upon request 60 days for monthly filers and 30 days for quarterly and annual filers.  The Quarter 1, 2020 return is now due June 30, 2020.  The Annual 2019 return is now due June 15, 2020.  Interest can only be waived to April 17.

Assistance from federal programs, including the Paycheck Protection Program, are not subject to the business & occupation tax.  Any penalties or interest will not accrue on any tax that may be due on such receipts.

For restaurants, sales of meals directly to the American Red Cross or U.S. Government are exempt from sales tax during COVID-19 emergency, though business and occupation tax will apply.

West Virginia – Second installment of 2019 ad valorem property taxes delinquent date will be extended from April 1 to May 1, 2020.

  • Martinsburg – March 2020 quarterly business & occupation (“B&O”) tax return due date is extended to May 31, 2020, with no penalties or interest.

Wisconsin – Sales and use tax returns due March 31 until April 30, 2020 and due April 30 until June 1, 2020.  No late filing fees or penalties will be assessed provided returns are filed by extended dates.  Interest will not be waived unless the legislature changes the law to allow it.  Extension requests are needed to be filed with the DOR.

Wyoming – Interest and penalties are waived for severance taxes filed late through the end of June 2020.  The treatment of sales and use tax returns will be considered on a case-by-case basis.

This will be updated weekly, for the time being, as this is a fluid time in taxes.  Should you have any questions, Anders State and Local Tax is here to help. Contact an Anders advisor to learn more about the COVID-19 extensions, or read other updates around COVID-19.

All Insights

March 5, 2020

Blake G. Shehorn

Keep up with Anders

Want to keep up with all the latest insights from Anders? Subscribe and receive the information that matters to you.

  • This field is for validation purposes and should be left unchanged.