Coronavirus Impact on State Tax Reporting

26 March 2020 Coronavirus Resource Center Blog
Authors: Lynn A. Gandhi

While the federal government has postponed Tax Day from April 15 to July 15, state tax agencies are not consistently following the federal extended due date for a myriad of reasons ranging from cash flow constraints to lacking the authority needed to postpone statutory deadlines. Additionally, many non-essential state and local agency offices are closed, and cannot accept in-person filings or payments.

Here are the top FAQ’s clients are asking:

Are the states following the federal change for state income taxes? 

Some states, such as Illinois, Alabama, Minnesota and Wisconsin have matched the federal move and will delay their state tax payments and filings to July 15.

Some states, including California and Georgia, have not adjusted their due dates and urge taxpayers to the extent possible to continue to file tax returns on time, including payments due.

What other tax filings may be affected and what are states doing?

Monthly sales and use tax payments, excise taxes on lodging and alcohol, as well as employee withholding taxes may also be affected due to the impact of the coronavirus on business operations and state and local mandated closures and stay at home orders.  Here, state responses may provide targeted relief, or relief for small businesses. 

For example, Alabama is providing a waiver for the payment of February, March and April sales tax liabilities for businesses engaged in food service, including those preparing food for immediate consumption.  Michigan is providing a 30-day waiver for monthly sales, use and withholding the late payment of sales and use taxes due in March for taxpayers other than accelerated sales, use or withholding filers.  At this time, no information is available if the 30-day waiver will be extended.  Illinois will waive late payments and penalties for taxpayers operating eating and drinking establishments with annual sales tax liabilities less than $75,000 for the prior calendar year.  Louisiana is also extending the deadline for excise taxes on sales, beer, and wine to May 20, 2020.

Property tax payments may also be affected, particularly those paid at the local, not state level.  The response from counties has been limited, with many without the ability to approve late payments or waive automatic late fees and penalties.

What should we do if we are shut down and unable to submit our returns?

If specific state guidance is not available, taxpayers should determine if they are able to submit payments and document the payment made. A request for extension or penalty waiver or abatement should also be submitted, in accordance with available statutory provisions, or for the lack of negligence and based on reasonable cause.

In summary, it is important for taxpayers to take additional steps now in order to mitigate their risk of interest, or penalties for suffering negative impacts from the coronavirus. For more information about recommended steps, please contact your Foley relationship partner. For additional web-based resources available to assist you in monitoring the spread of the coronavirus on a global basis, you may wish to visit the CDC and the World Health Organization.

Foley has created a multi-disciplinary and multi-jurisdictional team, which has prepared a wealth of topical client resources and is prepared to help our clients meet the legal and business challenges that the coronavirus outbreak is creating for stakeholders across a range of industries. Click here for Foley’s Coronavirus Resource Center to stay apprised of relevant developments, insights and resources to support your business during this challenging time. To receive this content directly in your inbox,

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services