State Tax Relief Available Due to COVID-19 Crisis

This alert summarizes (in alphabetical order by state) several types of state and local tax relief available in states where our offices are located and in selected other states. For questions about the relief available in any state or other state and local tax issues, please contact a member of the Ballard Spahr Tax Group.

Arizona: The deadline for filing and paying state individual, corporate, and fiduciary income taxes has been extended from April 15, 2020 to July 15, 2020. Taxpayers filing returns or paying taxes before July 15, 2020 will not be assessed late filing or late payment penalties. Taxpayers requiring additional time beyond July 15, 2020 should request an extension. The due date for estimated payments due on April 15, 2020 remains unchanged.

California: The state tax filing and payment deadlines for all individuals and businesses for 2019, 2020 first and second quarter estimated tax payments, 2020 LLC taxes and fees, and 2020 nonwage withholding payments is extended to July 15, 2020.

Additionally, Governor Newsom issued an executive order extending the payment and return date for first quarter sales taxes to July 31, 2020 for any business that owes less than $1 million for the quarter.

Colorado: The April 15, 2020 tax payment deadlines for all individuals and businesses have been extended to July 15, 2020. This extension applies to income tax payments and estimated tax payments due on or after April 15 and on or before June 15, 2020. Additionally, all returns due April 15, 2020 have automatically been extended until October 15, 2020.

The April 20, 2020, filing and payment due dates for sales tax also have been extended to May 20, 2020.  Penalties and interest will be waived provided taxpayers file returns and remit the full amount of state and state-administered sales tax due April 20 on or before May 20. Although this relief applies only to state-administered sales taxes, many self-collecting home-rule jurisdictions are announcing similar relief.

Delaware: The deadlines for corporate, personal, and fiduciary income tax returns and payments due on April 30, 2020 (the due date for most Delaware returns) are automatically extended to July 15, 2020. The Division of Taxation cautioned taxpayers that the payment deadline will be July 15, 2020 and penalties and interest on underpayments will be calculated from that date, even if a taxpayer requests an additional extension of time to file.

D.C.: The D.C. Office of Tax and Revenue (OTR) announced that the federal deadline extensions apply and that the deadline for taxpayers to file and pay their 2019 individual, partnership, fiduciary, and franchise tax returns is extended to July 15, 2020.

Note that OTR has confirmed that the deadlines for 2020 estimated tax payments have not been extended.

Additionally, penalties and interest for failure to timely pay sales and use tax for periods ending on February 29, 2020, or March 31, 2020, will be waived if all taxes for such periods are paid in full on or before July 20, 2020.

Florida: The state announced that property taxes due March 31, 2020 now are due April 15, 2020.  Additionally, sales taxes collected for March, originally due April 20, 2020, now are due April 30, 2020 for businesses adversely affected by the crisis.

Georgia: The Georgia Department of Revenue extended tax filing and payment deadlines for Georgia income taxes due on April 15, 2020, along with estimated income tax payments that would be due on April 15, 2020, to July 15, 2020.

Illinois: The Illinois Department of Revenue announced that Illinois tax returns due April 15, 2020 are automatically extended until July 15, 2020. The income tax filing and payment deadline extension applies to all individuals, returns, trusts, and corporations automatically. Penalties and interest will begin accruing on unpaid balances beginning July 16, 2020.

Illinois also announced that it is waiving interest and penalties for late payments of sales tax by restaurants and bars that were forced to close because of governmental orders.

Maryland: Maryland announced that all tax payments owed by business and individual income taxpayers originally due April 15, 2020 (along with applicable returns) are now due July 15, 2020. Likewise, estimated tax payments originally due April 15, 2020 and June 15, 2020 are extended to July 15, 2020. Payments for fiscal years ending January 1, 2020 through March 31, 2020 also are eligible for an automatic payment extension until July 15, 2020.

Maryland also announced that the March, April, and May filing and remittance deadlines for several business taxes, including sales and use taxes, withholding taxes, admissions and amusement taxes, and alcohol, tobacco, and motor fuel excise taxes, are extended until July 15, 2020.

Minnesota: Minnesota announced that Minnesotans have until July 15, 2020 to file their Minnesota individual income tax returns and to make tax payments without penalties or interest. This grace period does not include estimated tax payments for individual income taxes due April 15, 2020 for the 2020 tax year. The due date for Minnesota business income taxes will remain April 15. However, corporation income tax filers are automatically granted an extension to file their Minnesota return (but not to pay taxes) to the later of November 15, 2020, or the date of any federal extension. S corporations, partnerships, and fiduciaries receive an automatic extension to file their state return to the date of any federal extension to file.

Minnesota also granted a 30-day, interest-free, penalty-free, sales and use tax grace period for businesses required to suspend or reduce services. Businesses that owed monthly sales and use tax payments due March 20, 2020 or April 20, 2020 have until May 20, 2020 to make their payment without penalties or interest.

New Jersey: After weeks of negotiations focused on the state budget, Governor Murphy finally signed a law that automatically extends the payment and filing deadlines for the individual gross income tax and the corporation business tax (including estimate tax payments) from April 15, 2020 to July 15, 2020, matching federal deadlines. No penalties or interest will be imposed with respect to any returns filed or payments made by July 15, 2020.

New York: New York announced that, commensurate with extensions announced by the IRS, April 15, 2020 payment and filing deadlines will be extended automatically until July 15, 2020.

The new deadline is applicable to individuals and businesses, applies to tax filing and tax payment, and waives interest or penalties that would otherwise be charged. The payment extension applies to income tax payments for the 2019 calendar year as well as to estimated payments for the 2020 year that would be due on April 15, 2020.

New York also agreed to waive penalties and interest for late payments of annual or quarterly (but notably not monthly) sales taxes that were due on March 20 as long as such taxes are paid by May 20.

New York City taxpayers may request a waiver of penalties on late-filed extensions or returns of business and excise taxes due between March 16 and April 25, 2020. Interest however must be paid on all tax payments due after the original due date.

Pennsylvania: All Pennsylvania personal income tax (PIT) filing and payment deadlines conform to federal deadlines; PIT returns and payments due April 15, 2020 (including estimated tax payments) are automatically extended until July 15, 2020. Additionally, corporate tax reports originally due May 15, 2020 are now due August 14, 2020.

The Department of Revenue (DOR) announced that businesses required to remit sales tax (and that were required to remit $25,000 or more during the third quarter of 2019) are not required to make Accelerated Sales Tax prepayments on April 20, May 20, or June 22, 2020. Businesses are instructed to remit only the sales tax actually collected during the prior month.

The DOR also announced that federal stimulus checks issued under the CARES Act will not be subject to PIT.

All business licenses and certificates administered by the DOR, including sales tax vendor licenses and sales tax exemption certificates, will remain effective until further notice if scheduled to expire while the DOR’s offices are closed. Board of Appeals petitions for appeal (for all tax types) will be accepted as timely if filed by the later of (i) 30 days after the reopening of the Board of Appeals offices; or (ii) the original appeal deadline and the Board of Appeals will treat any submission of requested information as timely, as long as it is received within 30 days after the Board of Appeals’ offices reopen.

For more information about Pennsylvania’s relief provisions, see here and here.

Philadelphia: Businesses have until July 15, 2020 to file their business income and receipts tax returns and net profits tax returns and to pay the applicable tax. Payments made after July 15, 2020 will accrue interest and penalties from April 15, 2020.

The real estate tax payment deadline was extended from March 31 to April 30 and the deadline to apply for an installment plan for real estate taxes now is April 30.

In addition, employers are not required to withhold City Wage Tax from non-resident employees who are being forced to work from home due to business closures and stay-at-home orders.

School income tax returns and payments for 2019 are still due April 15, but taxpayers who file an extension by April 15 and who pay an amount equal to their 2018 liability will not be subject to interest and penalties for any balance remaining due that is paid by July 15.

Finally, the Revenue Department announced that business that are closed due to a governmental order are not subject to Business Use & Occupancy (U&O) Tax for the closure period. Although this relief applies only to businesses that are “closed,” in an updated notice posted on its website, the Revenue Department removed an example stating that an office with a skeletal staff remains open for U&O Tax purposes. It is not clear if this represents a change in the Department’s policy or if further guidance will be forthcoming.

Taxpayers have until July 15, 2020 to file an Earnings Tax return and pay any difference in Earnings Tax still owed. Payments received after July 15, 2020 will accrue interest and penalty from April 15, 2020.

See our alerts here and here for more information.

Utah: Utah follows federal filing and payment deadlines for all individuals and business returns (including pass-through returns); payments and returns due April 15 now are due July 15, 2020 (including estimated tax payments).

Virginia: Virginia announced that “while filing deadlines remain the same, the due date for payment of individual and corporate income tax will now be June 1, 2020.” However, the Virginia extension to pay, while penalty-free, is not interest-free. All income tax payments due between April 1, 2020 and June 1, 2020 (including estimated tax payments due April 15, 2020) can be made any time on or before June 1, 2020 without penalty. However, during the extension period, interest will accrue. If the full amount is not paid by June 1, 2020, no penalty waiver will apply, and late payment penalties (in addition to interest) will accrue from the original date that the payment was due.

The filing deadline for Virginia state individual income tax returns generally is May 1 of the year following the calendar year for which the return is filed and April 15 for calendar year corporations. Virginia provides an automatic six-month filing extension (seven months for corporations) to all taxpayers who file federal extensions; no separate application is required.

Businesses can defer the payment of state sales tax due on March 20, 2020 until April 20, 2020 and may request a waiver of any penalties, but not interest.  

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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.