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States Push Tax Deadlines, Shutter Offices During Pandemic (3)

March 18, 2020, 4:03 PM; Updated: March 18, 2020, 10:52 PM

It was a busy day in state tax news on Wednesday, as Louisiana prepared to roll out new measures, Michigan eased foreclosure rules, and other states said they would extend payment deadlines and end face-to-face meetings with the public. This is the latest on shifting state tax guidelines, deadlines, and policy to deal with the coronavirus pandemic.

Louisiana Gov. John Bel Edwards (D) indicated Wednesday that a change is coming to the state’s tax deadlines.

The current state deadline for filing individual income taxes and making payments is May 15.

Edwards, during his monthly radio question-and-answer show, said the state had been waiting to see what the Internal Revenue Service would do about its April 15 deadline for federal income taxes before the state made any adjustments. He was informed on-air that the Treasury Department issued guidance, which allows taxpayers to delay payment of federal income taxes for 90 days, though they are still required to file returns or seek extensions by April 15.

“We want to make sure we’re messaging consistently so we don’t unnecessarily confuse people,” Edwards said. “You’re going to be hearing an announcement about this very shortly. We need to be responsive.”

Michigan Tax-Foreclosure Delay

Michigan taxpayers facing foreclosure will get extra time to pay back taxes before counties take their properties under an executive order signed Wednesday by Gov. Gretchen Whitmer (D).

The order moves tax foreclosure deadlines across the state to May 29 from March 31, or 30 days after the state’s overall Covid-19 emergency (Executive Order 2020-4) is terminated, whichever comes first.

“This executive order will give families struggling to make ends meet real and immediate relief from the pressure of having their home foreclosed on while trying to focus on the health and safety of their loved ones,” Whitmer said in a statement.

Massachusetts to Extend Deadline

Massachusetts plans to deliver tax relief to small businesses especially hard hit by the impact of the coronavirus, Gov. Charlie Baker (R) told reporters Wednesday.

Baker said the state is preparing to announce an extension until June 20 in payments of sales, meals, and room-occupancy taxes for businesses that paid less than $150,000 in those taxes in 2018. Many business taxes would have been due April 15.

Minnesota Business Break

Gov. Tim Walz (D) said Wednesday that the Minnesota Revenue Department would grant businesses a 30-day extension on February sales tax returns, pushing the deadline to April 20 from March 20.

Speaking with reporters, Walz didn’t commit to the much broader request for relief made Tuesday by Doug Loon, president of the Minnesota Chamber of Commerce. In his letter, Loon called on the state to match the federal extension of the April 15 income tax payment deadline, grant a 90-day extension of the May 15 property tax payment deadline, and offer a quick refund option for businesses that have overpaid estimated taxes in Minnesota.

Washington Shutters Offices

Washington’s Department of Revenue said Wednesday that it was closing its public tax offices temporarily to battle the Covid-19 contagion in the hard-hit state.

“All of the in-person services provided at DOR offices are available online at dor.wa.gov,” it said.

Hawaii Closes Offices

Hawaii’s Department of Taxation said Wednesday that it has closed its offices to the public but is maintaining tax filing and payment deadlines.

In a notice posted on its website, the department asked the public to help protect the community by practicing social distancing. It urged taxpayers with questions to call or to use secure messaging on its website, which is available for filing returns, making payments and managing accounts.

Alabama Extends Sales Tax Dates

Alabama small businesses may delay payment of sales taxes for February, March, and April, the state’s revenue department announced Wednesday.

The state will waive late payment penalties through June 1 for businesses with retail sales averaging $62,500 per month or less.

“Similar sales tax relief may be available on a case-by-case basis to other businesses significantly impacted by the coronavirus (Covid-19) and the preventative measures being taken to limit its spread in Alabama,” the department said in a press release.

California Capital Gains Revenue to Fall Short

The extension of tax-filing deadlines in response to the coronavirus pandemic will alter California’s adoption of a budget for the fiscal year that starts July 1, the state’s fiscal and policy adviser said Wednesday.

New deadlines—June 15 for income tax filings and payments, and May 11 for sales tax filings and payments—are justified but make it difficult to project the revenue on which the budget would be based, Legislative Analyst Gabriel Petek said in a post to the Legislative Analyst’s Office website.

The stock market provides some insight into how capital gains might be affected, Petek noted, but it will take longer to know the effects on personal and corporate tax revenue. He said capital gains revenue would likely be several billion dollars below the projected $30 billion for the current and next fiscal year.

Lawmakers may need to adopt a baseline budget plan to meet their constitutional deadline of June 15 to send a plan to the governor, buying time to assess drops in income tax revenue and the costs of addressing the pandemic, Petek said.

Adjustments to the budget could be enacted after the impact is clear, he said, and the state could face budget problems in the 2020-21 fiscal year.

Nevertheless, total state reserves of $20 billion and a strong cash cushion put the state in a strong position to weather the public health crisis and downturn, he said.

New Jersey Closes Walk-In Offices

Walk-in office locations of the New Jersey Taxation Division are expected to be closed at least through March 31, under precautionary public health measures announced Wednesday by the state Treasury Department.

The temporary shutdown affects the division’s seven regional information centers, including its Trenton walk-in office. Anyone who typically drops off forms, correspondence, or payments should mail them in, the department said. Services will still be available online, over the phone, or through the mail.

The division said it would post updates and announce reopenings on its web page and social media sites, as the information becomes available. The department’s temporary closures also apply to its Pension and Benefit and Revenue and Enterprise Services divisions.

Maryland Granting 90-Day Filing Extension

Maryland is granting businesses and individual taxpayers the same 90-day extension for makiing income tax payments as the Internal Revenue Service, Comptroller Peter Franchot announced Tuesday. They’ll have until July 15 to file, he said.

“Extending the due date for Maryland state individual and business income tax payments helps us keep cash flowing in our economy and into employees’ bank accounts,” Franchot said in a press release.

Arizona Making It Easy


The Arizona Department of Revenue is reminding taxpayers how to pay taxes “from the comfort of a person’s home.”

While not explicitly linking its advice to the virus, the department sent a memo on Wednesday encouraging online filing and payment. For individual income tax, automatic six-month extensions are available to people who need more time through filling out a state form, the memo said.

Michigan Waiving Late Penalties

Michigan’s Treasury Department is waiving late-filing penalties for sales and use tax and employer withholding for 30 days in an effort to defray the economic damage caused by Covid-19.

“In recognition of the present challenges faced by these taxpayers, the Department of Treasury is waiving penalty and interest for the late payment of tax or the late filing of the return due on March 20, 2020,” the state’s guidance, issued Tuesday, says. “The waiver will be effective for a period of 30 days; therefore, any return or payment currently due on March 20, 2020 may be submitted to the Department without penalty or interest through April 20, 2020.”

Like many other governors, Gov. Gretchen Whitmer (D) has issued orders closing restaurants and bars to in-facility patrons, and has shut down entertainment venues across the state to combat spread of the novel coronavirus.

North Carolina Lifts Penalties

The North Carolina Department of Revenue said it is temporarily lifting penalties for failing to obtain a license, file a return, or pay taxes because of the coronavirus.

In a notice dated Tuesday, the DOR said that the penalty waiver applies to deadlines falling between March 15 and March 31, as long as the filing or payment is made by April 15. Taxpayers seeking the extension must file a state form NC-5500 and write “COVID-19” on the top of it.

Utah Office Hit by Earthquake

The Utah State Tax Commission closed its offices after a 5.7-magnitude earthquake damaged its building shortly after 7 a.m. Wednesday. The epicenter was in Magna about 15 miles west of downtown Salt Lake City, about 13.5 miles west of the commission’s offices. Prior to the quake, the commission’s tax processing personnel were reporting to work, using a separate entrance into the agency’s building that was established after the anthrax attacks that followed the 9/11 terrorist attacks.

The commission later said it wouldn’t conduct any business out of the main building until the damage had been assessed and it had been notified that it was safe to return.

Commission spokeswoman Tammy Kikuchi said in an email that commission business was continuing on a limited basis because many employees were already working from home due to Covid-19.

John Valentine, the commission chairman, told Bloomberg Tax on Tuesday that the state didn’t foresee any delays in the issuance of individual income tax refunds, given that the processing department was able to report to work, but it was unknown Wednesday morning whether the earthquake shutdown would change that.

New Orleans Eases Deadlines

New Orleans will waive fines, fees, interest, and penalties on sales tax payments due to the city for 60 days, Mayor LaToya Cantrell said Tuesday.

“The impacts of COVID-19 are going to leave a mark in history for the city,” she said, adding: “I have relaxed what is owed to the City—and businesses must use this opportunity to do everything in their power to help the residents of New Orleans—this includes paying employees.”

Charleston Defers Some Tax Collections

The city and county of Charleston, S.C., announced late Tuesday that it was delaying the collection of local accommodation and hospitality taxes for 90 days because of the coronavirus outbreak. Local officials said the move was meant to ease the burden on small businesses.

Charleston County levies a 2% accommodation tax and collects additional taxes for cities within its borders. The city of Charleston, a popular tourist destination, imposes a 2% hospitality tax on bars and restaurants.

The local action came the same day the state Department of Revenue announced that it was extending upcoming filing and payment deadlines until June 1.

—With assistance from Chris Marr in Atlanta, Tripp Baltz in Denver, Laura Mahoney in Sacramento, Adrianne Appel in Boston, Sam McQuillan in Washington, Michael J. Bologna in Chicago, John Herzfeld in New York, and Brenna Goth in Phoenix.

(Updates with expected Louisiana changes. Previous versions added information from Michigan, Massachusetts, Minnesota, Washington, Hawaii, Alabama, California, New Jersey, Maryland, Arizona, North Carolina, and Utah.)

To contact the reporters on this story: Jennifer Kay in Miami at jkay@bloomberglaw.com; Andrew M. Ballard in Raleigh, N.C. at aballard@bloomberglaw.com; Alex Ebert in Columbus, Ohio at aebert@bloomberglaw.com

To contact the editors responsible for this story: Jeff Harrington at jharrington@bloombergtax.com; David Jolly at djolly@bloombergtax.com

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