Our partner Avalara provides us with a guest post explaining how sales tax relief is being offered in a handful of states in light of COVID-19.
The new coronavirus (COVID-19) is impacting all businesses, in one way or another. While Amazon is experiencing a surge in sales, brick-and-mortar shops, restaurants, and other businesses that rely on foot traffic have seen sales plummet. To help them weather the COVID-19 storm, many states and cities are proving a variety of tax relief measures.
Programs to support individuals and businesses in need are available at both the state and local level. For example, Connecticut will provide zero-interest loans of up to $75,000 or three months of operating expenses (whichever is less) for eligible businesses. Los Angeles created a Small Business Emergency Microloan Program to “strengthen small business enterprises” during this difficult time. The list goes on.
Like the federal government, most states have pushed the due date for state income tax back to July 15, 2020 — though all states are encouraging businesses and individuals to file and remit income taxes as soon as possible. Estimated tax payment deadlines have been delayed in some states but not others.
Sales tax relief is more varied.
Sales tax relief
Sales tax relief is being offered in approximately 20 states and Washington, D.C. Most of these states are providing sales tax filing and payment extensions for specified filing periods. All are waiving penalties that would normally be associated with late returns and payments, and all but a few are waiving interest.
Relief is only for small businesses in some states, including Alabama and Illinois. Other states are providing relief for any business in distress due to COVID-19 response measures. Although less common, local sales tax relief is also available in some parts of the country: Several cities in Colorado have announced sales tax filing and payment extensions.
While extremely helpful, all this relief can be difficult to navigate: It’s one more thing to track during this stressful time, and it’s subject to constant change. For more information about the available tax relief, see Avalara’s COVID-19 tax relief roundup.
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