California mayors asked for help for the working class; Virginia extended some tax due dates; and a bill to extend tax deadlines in New Jersey has advanced to the governor. Here’s the latest on shifting state tax guidelines, deadlines, and policy to deal with the coronavirus pandemic. For Wednesday’s coverage click here
California’s big city mayors want Gov. Gavin Newsom (D) and the Legislature to use the California Earned Income Tax Credit (CalEITC) to pump some $1 billion in relief to the state’s lowest-income earners as Covid-19 hammers business and paychecks.
In a March 17 letter to Newsom, Senate President Pro Tem Toni Atkins and Speaker Anthony Rendon, the mayors suggested options include:
- A second CalEITC credit to people who have or will file a 2019 tax return and claim the credit. “This is a simple solution that provides households with children (already receiving larger credits) with more resources than households without children (whose credits can be very small). The cost is no more than $1 billion.”
- Have a floor of a $100-200 credit for households without children and other low-wage earners and a $2,000-$2,500 credit to households with children.
- Another option is a flat $200 credit for every household claiming the CalEITC.
- Immediately and retroactively include individual tax identification numbers for 2019 CalEITC and Young Child Tax Credit claims with an estimated cost of $100 million.
The coalition includes mayors of San Francisco; Los Angeles; Sacramento; San Jose, Oakland; San Diego; Stockton; Long Beach; Santa Ana; Anaheim; and Riverside. The mayors coalition each night has a conference call to identify priority issues “and are relaying these actively with the governors’ office,” Rachel Davis Disbrow, spokeswoman for San Jose Mayor Sam Liccardo, said Thursday.
Virginia Extending Deadlines
Virginia officials said Thursday that the state would provide both sales and income tax relief.
Sales tax returns that were normally due March 20 are now due April 20, they said. Businesses that file under the extended deadline must request a delay and will be charged interest, as a waiver requires a change to state law.
Aubrey Layne, the Virginia finance secretary said that the delay of such filings would “cost” the state about $145 million in revenues, with $30 million of that local funding.
Virginia also will delay the due date for payment of individual and corporate income taxes until June 1. Returns still must be filed by the normal May 1 date and interest will accrue on late payments unless lawmakers take action, Layne said.
North Carolina Offers More Relief
The North Carolina Department of Revenue has announced additional penalty relief measures.
In a notice issued Thursday, the department said it wouldn’t impose a penalty on businesses and individuals who pay income tax debt normally due on April 15 by July 15. Interest still will be due for delayed payments, as required by state law.
On Tuesday, the DOR said in a separate notice that it was temporarily lifting penalties for a limited period of time for failing to obtain a license, file a return, or pay taxes
A Reprieve for Louisiana Businesses
Louisiana businesses have until May 20 to file returns and make payments that would have been due Friday, the state Department of Revenue said Thursday.
The extension applies to sales, beer excise and wine excise tax returns and payments for the February 2020 tax period, the department said on its website. The extension is automatic, it said, meaning no extension request is necessary.
The state will waive penalties and interest for applicable returns and payments received by the extended deadline.
California Property Tax Payments Still Due
California may be giving a break until the summer for income tax filers but there’s no Covid-19 break yet for paying property taxes.
The San Mateo County Tax Collector and Treasurer has told property owners that while it’s sympathetic to their plight, only the state has the statutory authority to extend the deadline.
The tax collector plans to reopen its office by April 8, when the shelter-in-place order expires. But if the order remains in place on the due date, tax payments will be accepted without penalty on the next business day the office is open to the public, it said.
Oregon Takes Tolerant View on Underpayment
Corporations paying Oregon’s corporate activity tax won’t face underpayment penalties as long as they make a good-faith effort to estimate their first-quarter payments, the Department of Revenue said.
“The department understands that the pandemic may impact commercial activity, up or down, to an extent that makes it difficult for businesses to estimate their first payment,” the department said on its website. First-quarter payments are due April 30.
Oregon will soon say whether it is following the IRS’s decision to delay income tax payments until July 15. The state usually conforms to the IRS.
Oklahoma Deferring Some Payments
The Oklahoma Tax Commission said Thursday that it was following the Internal Revenue Service’s lead and allowing all individual and other non-corporate tax filers to defer up to $1 million in state income tax payments until July 15 from the previous April 15 deadline without penalties or interest.
The deferral also extends to self-employment tax. Corporate taxpayers get the same deferment on up to $10 million without penalties or interest. Taxpayers are still required to file their returns by the April 15 filing deadline, however.
The commission also encouraged taxpayers to use its online services, though it noted the lobby of its main office in Oklahoma City was “open for services to taxpayers which adhere to current CDC guidelines.”
Indiana Holding on to Cash
Indiana Gov. Eric Holcomb said Thursday that he would hold off on spending $300 million in reserve funds the state had intended for capital improvements—evidence of growing concern that the new coronavirus pandemic could sharply reduce tax revenue.
“The state will consider using bonding authority to move forward with the just-approved capital projects,” the Republican governor said.
Indiana taxpayers will get extra time to file and pay their individual income, corporate income, and property taxes under orders Holcomb announced Thursday. The state is extending the due date for individual returns and payments, along with estimated payments, from April 15 to July 15.
It is also extending the due dates for corporate returns and payments: those previously due by April 15 are now due July 15, and those previously due May 15 are now due on Aug. 17.
Late property tax penalties will also be waived for 60 days for property tax paid after May 11, and the state has promised to help counties that run into fiscal crises due to the lack of this revenue.
Washington State Operating Online
Offices of Washington’s Department of Revenue’s are closed to the public until at least April 1 to minimize contact between customers and staff, the department said, warning that a longer closure period was possible.
All services usually provided in person are available online, and call center staff are available from 8 a.m. to 5. p.m., it said.
New Jersey Senate Backs Extensions
The New Jersey State Senate on Thursday unanimously approved legislation to automatically extend tax deadlines if the IRS extends filing or payment due dates for federal returns. The bill (A3841/S2300) goes now to Gov. Phil Murphy (D) for signature, having passed the state General Assembly Monday.
It’s the only tax measure in a bipartisan legislative package approved Thursday as part of the state’s response to the coronavirus outbreak. The Internal Revenue Service has given taxpayers another 90 days to send in payments but hasn’t extended filing deadlines.
State Senate President Steve Sweeney (D) has suggested further tax-relief measures could be coming, among them: a payroll tax holiday, a sales tax holiday for May and June, deferred property tax payments, a 60-day deferral of February and March sales tax payments, and a business tax credit to offset the costs of paying quarantined workers.
Michele N. Siekerka, president of the New Jersey Business and Industry Association, said in a statement that the approved bills “are not perfect, as is often the case in expedited legislation,” but that they will provide some help. The association said it’s pushing for more relief measures, including the steps urged by Sweeney.
Expedited Processing in Hawaii
Hawaii’s Department of Taxation said Thursday it was using a 15-day closure to the public to expedite its tax return processing.
“Refunds will give the people of Hawaii cash during this emergency,” the department said. About 75% of Hawaiian taxpayers will request a refund, it said.
NYC Comptroller Urges Small-Business Relief
New York City should suspend payment of its commercial rent tax for two months for ground-floor retailers with demonstrated losses, and New York state should consider a limited sales tax holiday for restaurants, hotels, and stores, according to city Comptroller Scott Stringer.
The tax measures were among several Stringer suggested Thursday in an open letter to small businesses, in which he addressed the economic consequences of the coronavirus pandemic. The steps would nonetheless cost the city and state millions of dollars in lost revenue, he noted, on top of $3 billion in estimated losses from sales, income, and other tax revenues in the next six months.
Stringer also called for Congress to create a fiscal stimulus fund like one enacted in 2009 to add funding for public services to state and local governments with substantial revenue losses.
Florida Shuts Offices
Florida’s Department of Revenue said Thursday that it was closing all of its offices to “minimize exposure to COVID-19 and help protect visitors and employees.” The department noted that its website offers help for child support matters, and encouraged taxpayers to send any Covid-19 questions to COVID19TAXHELP@floridarevenue.com.
Meanwhile, Gov. Ron DeSantis (R) has promised there will be news of more flexibility in areas like the state’s corporate income tax, but so far there is nothing official on that score.
California Again Extends Deadlines
California pushed its income tax filing and payment deadlines out another 30 days to July 15 and added more categories to the relief in response to the coronavirus pandemic.
The state Franchise Tax Board updated its deadlines late Wednesday, five days after extending filing and payment deadlines from April 15 to June 15. The payment deadline extension is consistent with the Internal Revenue Service’s Wednesday payment-extension announcement. The IRS is maintaining the April 15 deadline to file returns.
On Thursday, the board clarified that the relief applies to everyone. It also added a handy chart of Covid-19 extensions to file and pay.
California is extending individual and business entity deadlines for:
- 2019 tax returns
- 2019 tax return payments
- 2020 first and second quarter estimated payments
- 2020 taxes and fees for limited liability companies
- 2020 non-wage withholding payments
Taxpayers should continue to file returns so they can get refunds, the board said. During the state of emergency, the board said, it continues to process returns, issue refunds, and provide phone and live chat assistance.
--With assistance from Jennifer Kay in Miami, Andrew M. Ballard in Raleigh, N.C., Paul Stinson in Austin, Texas, Joyce E. Cutler in San Francisco, Andrew Ballard in Raleigh, N.C., and Alex Ebert in Coumbus, Ohio.