State tax relief in response to the COVID-19 (Coronavirus) pandemic has impacted many taxpayers. The relief has generally included extending filing and payment dates and providing penalty relief. Almost all the states have now responded to the federal extension.
Federal Response to COVID-19
Federal income tax returns and payments originally due on April 15, 2020 are extended to July 15, 2020. The extension is automatic and available to all taxpayers, including:
- trusts and estates;
- corporations; and
- other non-corporate entities.
The extension includes taxpayers who pay the self-employment tax. Any interest, penalty, or addition to tax for failure to file or pay tax will not accrue until July 16, 2020.
State Reaction to COVID-19
Almost all of the states have followed the federal example and provided tax relief. Nearly every state has now changed income tax filing and payment deadlines. Many of the states have also provided some relief on property and sales and use taxes.
Adopting the Federal Income Extension
The states have mostly chosen to grant automatic income tax extensions matching the federal extension. This means taxpayers will not need to apply for these extensions.
States extending the corporate and personal income tax deadline to July 15 include:
- District of Columbia;
- New Jersey;
- New Mexico;
- New York;
- North Carolina;
- North Dakota;
- Rhode Island;
- South Carolina;
- West Virginia; and
The states began extending deadlines after the federal extension was announced. Many of the states are still updating guidance. In the additional guidance states often discuss:
- the specific forms their extension applies to;
- the due dates of estimated payments; and
- nexus concerns for teleworkers.
States Adopting a Different Income Extension
There are several states that have chosen a different income tax extension date. For example:
Idaho stated that it chose June 15 to ensure payments arrived before the end of the fiscal year. The state’s constitution requires a balanced budget, so payments had to arrive before the fiscal year end. Mississippi used similar reasoning when extending its due date to May 15.
New Jersey faced similar concerns when extending the filing date to July 15. However, the governor and legislators were able to reach an agreement to extend the fiscal year until September 30th so the state’s budget process would not be impacted.
Pennsylvania has different corporate and personal income tax filing dates. The corporate return is always due 30 days after the federal return. So, Pennsylvania now has a:
- July 15 filing and payment date for personal income tax; and
- August 14 for corporate income tax.
Property Tax Relief
States have also chosen to extend some property tax deadlines.
Florida has extended the date to pay property taxes in all counties from March 31 to April 15.
Idaho has extended the deadline, until June 15, 2020, for:
- the property tax deduction;
- property tax deferral; and
- 100% service-connected disabled veteran benefit program.
West Virginia second half 2019 ad valorem property tax that would become delinquent on April 1, 2020, will now become delinquent if not paid on or before May 1, 2020.
Sales and Use Tax
States are also granting sales tax relief.
Colorado is extending the due date for state and state administered local sales taxes due April 20, 2020 to May 20, 2020, without penalty or interest.
Illinois is waiving any penalty and interest on late sales tax payments for bars and restaurants with total sales tax liability under $75,000 in calendar year 2019. Taxpayers must still file their sales tax return.
New York may waive penalty and interest for quarterly and annual sales and use tax filers who were unable to file or pay on time due to COVID-19. Returns must be filed, and the amount due must be paid, within 60 days of the due date for the relief to apply.
By Andrew Soubel, J.D.