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Coronavirus Causes Sales Tax Updates for 2020

Coronavirus Causes Sales Tax Updates for 2020
Ines Zemelman, EA
26 January 2021

The COVID-19 coronavirus disease caused so many changes in literally everyone’s life and every sphere of our lives, too. Sales taxes are no exception. Let’s see what happened in 2020 to U.S. states’ sales taxes due to coronavirus.

Alabama sales tax

Alabama provided payment extension and waived penalties for late payments for small retail businesses, restaurants included, if their monthly sales during the previous calendar year were $62,500 or less. The Alabama Department of Revenue waived penalties for those businesses’ sales tax liabilities through June 1, 2020.

California sales tax

California Department of Tax and Fee Administration (CDTFA) extended the relief to businesses with $1 million or less in tax. If a taxpayer doesn’t qualify for an automatic extension they still may request an extension if they are not able to file and pay taxes timely.

The CDTFA allowed taxpayers who make less than $5 million in taxable annual sales to apply for a 12-month interest-free payment plan and use tax liability. 

There was one more thing to keep in mind: businesses directly affected by coronavirus could qualify for a 3-month extension to file and pay sales taxes.

Colorado sales tax

The sales tax deadline was changed from April 20, 2020, to May 20, 2020. The Department of Revenue waived penalties and interest during this period.

Connecticut sales tax

Small business owners in Connecticut can qualify for an automatic extension of time in order to file and pay taxes if they have not more than $150,000 in annual sales tax and annual room occupancy tax liability. 

Washington D.C. sales taxes

Businesses were able to extend a tax deadline in February and March to postpone payment until July 20, 2020

Florida sales tax

Sales and use tax deadline was changed from February to March 31, 2020. For taxpayers who couldn’t meet the deadline due to COVID-19, there was an opportunity to get an extension to April 30, 2020.

Illinois sales tax

Qualified taxpayers with liabilities under $75,000 were allowed to postpone payments for February, March, and April until May 20, 2020, with no penalties or interest charged. As for small businesses in the City of Chicago, IL, they got a two-month delay if they were unable to pay the taxes on time. 

Iowa sales tax

Iowa announced that penalties and interest were suspended throughout April 16, 2020.

Indiana sales tax

For those living in the State of Indiana, property tax payments were waived on May 11, 2020, for 60 days.

Kansas sales tax

Rates for underpayment and overpayment were updated 6% or 0.5% per month accordingly.

Louisiana sales tax

In Louisiana, March and April returns and payments deadlines were automatically extended to June 30, 2020.

Maryland sales tax

In the state of Maryland, filing and payment deadlines were extended to July 15, 2020

Massachusetts sales tax

The deadline for returns and payments was extended for periods beginning February 1, 2020, through July 31, 2020, due by September 20, 2020

As for vendors whose cumulative sales and use tax liabilities in the 12-month period ending February 29, 2020, were less than $150,000, returns due were moved to June 20, 2020.

Michigan sales tax

In Michigan, a new payment plan for business taxpayers was released. Returns were expected by June 20, 2020. Payments from February through May were eligible to participate in the new installment plan. There was also a notice that gave businesses extra time and waived penalties and interest in deferred payments until June 20, 2020.

Minnesota sales tax

As for Minnesota, the Minnesota Department of Revenue granted a 30-day sales and use tax grace period for businesses mentioned in Executive Order 20-04. For that period of time, penalties and interest were waived. 

Mississippi sales tax

In Mississippi, interest and penalties on unpaid taxes were delayed for the time period of national emergency.

New York sales tax

An announcement regarding the abatement of penalties and interest for sales and use tax due to COVID-19 was made. To apply for relief, taxpayers had to visit the official website of the New York State Department of Taxation and Finance.

North Carolina sales tax

In North Carolina, tax penalty relief was extended from March 15, 2020, to July 15, 2020.

North Dakota sales tax

Taxpayers were allowed to request more time for filing tax returns and paying taxes if they were not able to do it due to the coronavirus situation. 

Pennsylvania sales tax

Pennsylvania waived penalties for businesses that had to make Accelerated Sales Tax prepayments for the deadline of Friday, March 20.

Rhode Island sales tax

Taxpayers in Rhode Island had an opportunity to request penalty abatement

South Carolina sales tax

For South California taxpayers’ tax returns and tax payments, the due date was changed to June 1, 2020. Penalties and interest waived.

Vermont sales tax

As for Vermont businesses, there were no penalties or interest for late payments for the due dates of March 25 and April 25.

Virginia sales tax

Virginia businesses affected by the coronavirus situation could count on deferring payments up to April 20, 2020.

Washington sales tax

Taxpayers in Washington could request an extension, but they were expected to still file on time if possible.

Wisconsin sales tax

In Wisconsin, it was possible to request a one-month extension to file tax, sales, and returns. 

Ines Zemelman, EA
Founder of TFX