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

We continue 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.

Due to COVID-19, the Internal Revenue Service (IRS) announced extensions of deadlines to pay various federal taxes and file various federal tax returns, including Notice 2020-18 (March 21, 2020), Notice 2020-20 (March 27), and most recently, Notice 2020-23 (April 8). Although some of these extension dates are different, most are automatically granted to July 15, 2020. However, the IRS Notices may not govern tax payment and return filing requirements imposed by states.

This special edition reviews specific updates by several states regarding short-term taxpayer responsibilities as a result of the pandemic.

Alabama – Further Updates Reported

On May 4, 2020, the Commissioner of the Alabama Department of Revenue issued an Order extending through June 19, 2020 the time for obtaining March, April and May 2020 motor vehicle registrations and paying property taxes on vehicles. Further, the Order states that this extension includes the registration of vehicles purchased or otherwise acquired whereby the 20-day registration requirement falls during the period of March 17 through June 19, 2020. This extension also applies to motor vehicle registration and renewals for vehicles registered pursuant to the International Registration Plan. According to the Order, penalty charges associated with motor vehicle registrations and renewals and motor vehicle property tax payments extended to June 19, 2020 will not be charged until June 22, 2020. More information can be found here.

District of Columbia – Further Updates Reported

On April 30, 2020, the District's Office of Tax and Revenue (OTR) published extensions for three important deadlines potentially pertinent to many property owners in the District. Those extensions include a May 15, 2020 extension from April 30 for the first level assessment appeals (tax year 2021); a June 1 extension from April 30 for Income and Expense Reports; and a May 15 extension from April 1 for Exempt Property Annual Use Reports. Separately, and due to the coronavirus (COVID-19) pandemic, the mayor of the District of Columbia had declared a public emergency and a public health emergency. With significantly more individuals working remotely from their homes than ever before, the OTR has announced that it will not seek to impose corporation franchise tax or unincorporated business franchise tax nexus solely on the basis of employees or property used to allow employees to work from home (e.g., computers, computer equipment, or similar property) temporarily located in the District during this period. More information regarding these developments can be found here and here.

Florida – Further Updates Reported

On April 27, 2020, the executive director of the Florida Department of Revenue issued Order of Emergency Waiver/Deviation #20-52-DOR-003 which extends the due dates for Florida corporate income tax payments and returns as follows: (1) for entities with a fiscal year ending December 31, 2019, the Florida corporate income tax return otherwise due on May 1, 2020 is extended to August 3, 2020, with the May 1 due date for payments associated with that return extended to June 1, and with the due date to submit a request for extension of time to file the return and make tentative payments extended to June 1; (2) for entities with a fiscal year ending January 31, 2020, the June 1 due date for the return is extended to August 3, and the June 1 due date for making payments or submitting a request for extension of time to file remains June 1; and (3) for entities with a fiscal year ending February 29, 2020, the July 1 due date for the return is extended to August 3, and the due date for making payments or submitting a request for extension of time to file remains July 1. The Order also states that Florida corporate income tax payments "should be based on the corporation's best estimate of the amount that would be due with the returns" and that this Order does not change the current due dates of the estimated payments which are due between April 1, 2020 and July 15, 2020. More information can be found here.

Georgia – Further Updates Reported

The Georgia Department of Revenue announced on April 16, 2020 that the state estimated income tax payments due on June 15, 2020 have been extended to July 15, 2020, as well as any other estimated income tax payments due after April 15, 2020 and before July 15, 2020. The Department had previously announced that the estimated income tax payments due on April 15, 2020 were extended to July 15, 2020. Further, any income tax return and payment due after April 15, 2020, and before July 15, 2020, is also due now on July 15, 2020. The Department stated that this extension adds additional corporate filers, as well as other fiscal year income tax filers, to the relief previously announced. It noted that the statute of limitations to file a refund claim for a previous tax year has been extended to July 15, 2020 with respect to refund claims that would have expired from April 15, 2020 and before July 15, 2020. Also, the Department stated that it has been given a 30-day extension within which it can perform certain time sensitive actions if the last date for the performance of the action is on or after April 15 and before July 15, 2020. More information can be found here.

Louisiana – Further Updates Reported

On April 22, 2020, the Louisiana Department of Revenue issued Bulletin No. 20-011 providing that the April 25, 2020 deadline for the February 2020 monthly oil and gas severance tax return, payment, and report has been extended to June 25, 2020. The Bulletin states that this is an automatic extension and that no extension request is necessary; and that no penalties or interest will be assessed provided that the applicable monthly return, payment, and report for this severance tax period is submitted to the Department by the June 25 extension date. Lastly, the Bulletin states that this extension does not apply to severance tax returns, payments, or reports due on any other dates. More information can be found here.

Maryland – Further Updates Reported

On May 4, 2020, the Maryland Office of the Comptroller published Tax Alert 05-04-20 which superseded the Alert issued on May 1, and which addresses certain employer withholding requirements. According to Alert 05-04-20, Maryland employer withholding requirements are not affected by the current shift from working on the employer's premises to teleworking because taxability is determined by the employee's physical presence. This new Alert states that Maryland imposes income tax, and therefore a withholding requirement on employers, for employees domiciled in Maryland, statutory residence of Maryland, and non-residents receiving Maryland-sourced income. The Alert did note that residents of Virginia, Washington, D.C., West Virginia and Pennsylvania who earn wages, salary and certain other income for services performed in Maryland are exempt from the Maryland state income tax, and therefore from withholding, because Maryland has a reciprocal agreement with these states. The Alert also sets forth various FAQs addressing withholding requirements. More information can be found here.

Mississippi – Further Updates Reported

On May 5, 2020 the Mississippi Department of Revenue issued Notice 80-20-02 announcing that Mississippi has extended the due date for filing income tax returns and making first and second quarter estimated payments until July 15, 2020. The new due date applies to individual, corporate and fiduciary income tax returns. More information can be found here.

South Carolina – No Further Updates

Tennessee – Information Reported

The Tennessee Department of Revenue has provided information on its website that the Department is available to assist business owners who may find themselves unable to pay their taxes in full at the time of filing. The website states that taxpayers may request a penalty waiver or a payment plan that allows for monthly payments over time. Information regarding a potential penalty waiver or payment plan can be found here.

Texas – Further Updates Reported

On April 27, 2020, the Texas Comptroller updated its website regarding certain relief offered to Texas taxpayers. For example, this update again noted that in order to aid Texas franchise taxpayers, the Comptroller is automatically extending the due dates to file and pay 2020 Texas franchise tax reports to July 15, 2020. Additionally, an extension of up to 90 days past the original due date is provided in order to pay the motor vehicle tax due on purchases. Further, with respect to businesses struggling to pay the full amount of sales taxes they collect from customers, the Comptroller is offering short-term payment agreements and, in most instances, waivers of penalties and interest. More information regarding these accommodations can be found here.