COVID-19 is tragically impacting our health as well as irrevocably altering much of our way of life. Health is first priority.

Still, we are continuing to monitor various state reactions to this pandemic for purposes of understanding short-term tax and tax return responsibilities.

Please take precautions to stay safe.

Federal Treasury Secretary Steven Mnuchin previously announced a 90-day deferral for individuals and many businesses in making certain tax payments to the IRS. Separately, recently published IRS Notice 2020-18 has advised that the April 15 due date for return filing purposes will be moved to July 15 to coincide with the 90-day payment deferral and that there is no limitation on the amount of the payment that may be postponed to July 15.

This special edition reviews similar reactions thus far by several states regarding short-term tax payment and return filing responsibilities implemented because of this pandemic.

Alabama – Further Updates Reported

In a press release updated April 1, the Alabama Department of Revenue made several announcements regarding taxpayer relief orders previously issued. For instance, the Department reiterated that it is: (i) waving state sales tax late payment penalties both for small retail businesses (monthly retail sales during the previous calendar year averaged $62,500 or less) and taxpayers currently registered with the Department as engaging in NAICS Sector 72 business activities (which includes businesses preparing meals, snacks and beverages for immediate consumption); and (ii) waiving state late payment penalties for lodgings taxes. The Department noted that this relief applies to state sales and lodging taxpayers who are unable to timely pay their February, March and April 2020 sales and lodging tax liabilities, but does not provide a waiver or extend normal filing requirements. The Department stated that these taxpayers may file their monthly sales and lodging tax returns for February, March and April 2020 reporting periods without paying the state sales and lodging taxes reported as due and late payment penalties will be waived for these taxpayers through June 1, 2020. The Department noted that this relief only applies to state sales and lodging tax liabilities, and that this relief is automatic for small retailers and Section 72 businesses who file their February, March and April 2020 sales tax returns. The Department did note, however, that similar sales tax relief may be available on a case-by-case basis to other businesses significantly impacted by COVID-19 and the preventative measures taken to prevent its spread within Alabama. The Department set forth various FAQs and other information within this updated press release. More information can be found here.

Florida – No Further Updates

Georgia – Further Updates Reported

The Georgia Department of Revenue has included FAQs on their website which address a number of questions dealing with the extended 2019 filing deadline. That deadline has been extended from the original due date of April 15 to July 15 with respect to Georgia income tax payments and Georgia income tax returns that were due on April 15. The response to one of these questions involves whether the extension also applies to a fiscal year filer where the state income tax return is due on April 15; the response given is "Yes, if your state income tax return for your fiscal year ending during 2019 is due on April 15, your due date is postponed to July 15. This would apply regardless of whether that is the original due date or the due date on extension." More information can be found here.

Louisiana – Further Updates Reported

By Revenue Ruling 20-002 dated March 30, the Louisiana Department of Revenue provided deadline extensions for various tax and tax-related obligations. As stated in this Ruling, the Department (i) will automatically waive any underpayment of estimated tax penalty otherwise due for the April 15 and June 15 individual declaration payments provided that the taxpayer pays the April 15 and June 15 declaration payments timely, the amount paid on April 15 is at least 90 percent of the amount paid on April 15, 2019, and the amount paid on June 15 is at least 90 percent of the amount paid on June 17, 2019; and (ii) shall consider any otherwise late filed election made after April 15 by an S corporation, or by an entity taxed as a partnership for federal income tax purposes, to pay tax on its income, to be filed timely if such election is made for the 2019 tax year on or after April 16 but before July 16; and (iii) extends the deadline for a credit transfer or for the execution of a binding agreement to transfer such credit for 2019 income and franchise tax returns by 30 days in accordance with that Ruling. More information can be found here.

Maryland – Further Updates Reported

The Comptroller of the State of Maryland has included a Tax Alert dated March 20 on its website for purposes of addressing various questions dealing with the extended deadline for filing 2019 income tax returns and submitting 2019 income tax payments. That extension is to July 15 and Maryland individual, corporate, pass through entity, and fiduciary taxpayers are afforded the same relief at the Maryland level. This Alert also states that while the deadline to file the 2019 income tax return is July 15, interest and penalties shall be assessed on any unpaid tax from July 15 until the date the tax is paid. Further, the Alert states that fiscal year filings with tax years ending January 1 through March 31 are also eligible for the July 15 extension for filing returns and payment. Additionally, the due date for March quarterly estimated payments of 2020 taxes is also extended to July 15. The Alert also discusses the October 15 extension for individuals and the November 15 extension for corporations, which remain unchanged. Other specific extensions are provided for certain other Maryland taxes, such as sales/use taxes, withholding taxes, admissions and amusement taxes, alcohol taxes and tobacco taxes, among others. Further, the Alert states that the Comptroller' Office will cease certain tax collection efforts and such cessation is effective until 30 days after the lifting of the State of Emergency by the Governor of the State. Under this cessation, the Comptroller's Office will not send out lien warning notices, issue liens, attach bank accounts, hold up the renewal of any license, or offset vendor payments for Maryland taxes. In that regard, taxpayers who are currently on a payment plan for delinquent business and/or income taxes and who are unable to make those payments due to the COVID-19 crisis are encouraged by the Alert to contact that Office (contact information in the Alert) to discuss delaying payments. More information can be found here.

Mississippi – No Further Updates

South Carolina – No Further Updates

Tennessee – Further Due Date Changes Reported

On March 31, the Tennessee Department of Revenue issued Notice #20-07 advising that the Department has extended the due date for filing and paying the Business Tax from April 15 to June 15. As referenced in that Notice, the Business Tax is a tax on gross receipts that applies to most businesses selling goods or services. The Notice further states that interest and late filing penalties will not be applied to returns filed and payments made on or before this June 15 extended due date. This Notice only applies to the State and local business tax to returns and payments due on April 15. Find more information here.

Texas – Further Updates Reported

As updated through March 31, the Texas Comptroller's Office addressed situations involving taxpayers that have existing payment plan agreements with that Office. Pursuant to this update, the Comptroller stated that postponement of deadlines to remit payments under existing payment plans will be considered on a case-by-case basis. However, that update also stated that postponement of payment deadlines will only apply to existing payment plan agreements for periods prior to the February 2020 tax report. The update also stated that potential postponements will not extend or delay a taxpayer's due dates for remitting or reporting tax collected on behalf of state and local governments, and that it will also not apply to resolution agreements that specify a deadline to make a single lump sum payment of the entire liability. The update further stated that the total amount due under the payment plan will not be reduced and that after expiration of the postponement period, all payment deadlines will resume on the next periodic payment deadline as provided in the payment plan agreement and that postponed payments will be added to the end of the term of the agreement. Separately, the Comptroller's Office announced that business owners affected by COVID-19 can request, in writing to the chief appraiser, an extension of the deadline to May 15 to file most property tax renditions with their county appraisal districts, assuming the district has not already implemented extensions. More information can be found here.