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New York Waives Penalties and Interest for Sales and Use Tax Due to COVID-19

A Smidgen of Tax Relief for NYC and “Orange Zone” Restaurants & Food Services

During times of financial struggle, many businesses are faced with the dilemma to make payroll and rent or pay state sales tax that comes due. While collecting and not remitting New York State sales tax is a crime, paying sales tax in lieu of payroll or rent allows the business to stay open. Sometimes the thought of catching up next month turns into 3 months, which turns into 6 months and next thing you know, the business has dug a huge sales tax liability that it cannot make up. As a result of COVID-19 in 2020, many New York City business owners, particularly restaurants, have gotten drastically behind in their sales tax obligations.

Recently, a glimmer of good news came out for (some) New York restaurants and food services struggling to survive the State’s draconian lockdown measures:

The New York sales and use taxes due on December 21, 2020, will not incur penalties or interest for late filing and payment through March 22, 2021. This relief is available to qualifying restaurants and food services located in “orange zones” (including New York City), which were required to suspend indoor dining.

For those that qualify and apply for the relief; any tax returns not filed and paid-in-full by March 22, 2021, will be hit with penalties and interest, so be sure to mark your calendar and set a reminder, or three.

Also, you must APPLY for this relief! It is not automatically granted to the affected businesses. Apply for the relief with the New York State Department of Taxation and Finance here.

NOTE: This relief is not available to grocery stores or other retailers that have a restaurant or foodservice within their store. Nor is it available to any business that participates in the state’s mandatory PrompTax program.

See the full Notice from the NY Department of Taxation and Finance here.

At Sales Tax Helper, not only do we represent companies during state sales tax audits and appeals, but we also provide important consulting services for you or your client’s businesses to prevent the audit in the first place. Schedule a free consultation here.