Since the onslaught of the small business community by the coronavirus, we have received dozens of calls asking what companies should do for their state sales tax problems. Should I forgo paying sales tax and use the money to pay rent? Pay employees? Pay vendors to stay open? Unfortunately, the states, like everyone else in the world, are unsure how to handle and manage this fluid situation. Likewise, it is difficult for us to give advice if the federal, state, and local governments deal with other issues in this terrible situation.
The generic answer is somewhat straightforward. If your business collects but fails to remit state sales tax, it is a crime. However, it is unlikely a state will pursue criminal sanctions given the dire position most businesses are in. Further, many states have begun to extend filing deadlines and have officially or unofficially announced that penalties would be forgiven during the current state of turmoil.
Given the constant state of unknowns, may platforms have begun tracking state and local tax announcements by state:
- American Institute of CPAs (AICPA) – Resource Center.
- Council on State Taxation (COST) – Tracking Chart by state.
- Sales Tax Institute – Coronavirus Tax Filing Relief & Resources
- Tax Foundation – State Legislative Responses to COVID-19.
- Withum – State Tax Updates
We continue to remain open to assist your business in any way that we can. If you have any questions do not hesitate to call. We will continue to monitor and post new resources as they become available. State safe!