During these difficult times, we are beginning to see state and local taxing jurisdictions loosen the reigns on sales and use tax payment deadlines throughout the next several months. These types of alterations only occur during extreme situations that impact a vast population of taxpayers. So far, many taxing authorities have communicated options to assist restaurants and hospitality venues severely affected by the complete loss of revenue due to the recent social bans.
Minnesota
March 18, 2020: The Minnesota Department of Revenue has granted a 30-day extension for sales tax payments originally due on March 20 for selected businesses identified in the Executive Order 20-04. Such businesses include restaurants, bars, food courts, theaters, fitness centers and amusement parks–essentially any place of public accommodation. Select businesses will have until April 20 to pay sales tax liabilities without incurring penalties and interest, but they still must file the return by March 20.
Illinois
March 19, 2020: Illinois announced that will be granting small to mid-size bars and restaurants a two-month reprieve from paying sales tax. This grace period is intended to help businesses preserve liquidity while still incurring expenses if income is negatively impacted. This will apply to those that paid less than $75,000 in sales tax during 2019. These establishments will still be required to file sales tax returns for March and April, but the related payments can be allocated evenly during the May 20 - August 20 deadlines.
Massachusetts
March 18, 2020: The governor of Massachusetts released a statement that will grant tax relief measures for restaurants and hospitality businesses. The Department of Revenue will finalize the emergency regulations by March 20, 2020. The proposed tax relief plan will postpone the payments of sales tax throughout March, April and May, making them due on June 20. This will apply to businesses that paid less than $150,000 in regular sales plus tax in the year ending February 29, 2020. Read the press release.
We expect more extensions and reprieves to be announced during the next couple of weeks. We will continue to monitor these changes and communicate significant updates. In the interim, should you have any questions regarding your specific tax situation, do not hesitate to reach out to one of Duff & Phelps' experienced tax professionals for guidance during this volatile time. We encourage all companies that need assistance to contact us. Additional information about our Sales and Use Tax team and services offered can be found here.
