COVID-19 Tax Relief: California Delays Sales Tax Payments For Small Businesses

In response to the COVID-19 pandemic, on March 30, 2020, Governor Gavin Newsom signed an executive order that will provide tax, regulatory and licensing extensions for businesses.

Order provides 90-day extension in state and local taxes, including sales tax

Order extends licensing deadlines and requirements for a number of industries

The executive order allows the California Department of Tax and Fee Administration (CDTFA) to offer a 90-day extension for tax returns and tax payments for all businesses filing a return for less than $1 million in taxes. That means small businesses will have until July 31, 2020 to file their first-quarter returns.

Additionally, the order extends the statute of limitations to file a claim for refund by 60 days to accommodate tax and fee payers.

Other Administrative Extensions Under The Executive Order

The executive order also includes extensions that impact state government workers, as well as consumers. For instance, the Department of Motor Vehicles will limit in-person transactions for the next 60 days, allowing instead for mail-in renewals. Additionally, the Department of Consumer Affairs will waive continuing education requirements for several professions, also for the next 60 days.

Further, the order will extend the Office of Administrative Law’s deadlines to review regular department proposed regulations. The order also extends by 60 days the time period to complete investigation of public safety officers based on allegations of misconduct. Finally, deadlines for trainings, investigations, and adverse actions for state workers will also be extended.

Small Businesses May Defer Up to $50,000 of Sales and Use Tax Liability for 12 Months

On April 2, 2020 Governor Newsom announced that all businesses with less than $5 million in annual taxable sales the ability to defer payment on up to $50,000 in sales and use tax liability without incurring any penalties or interest. For taxpayers choosing to defer their 1st quarter 2020 liability, for example, up to $50,000 of the obligation would now be paid in twelve equal monthly installments, with the first payment not due until July 31, 2020.

An Opportunity For Taxpayers Who Owe The CDTFA

Do not think that if you owe the CDFTA your tax problem will disappear because of the measures being considered by the government. Instead you should be utilizing this valuable time to get yourself prepared so that when activity in this State regains momentum, you are ready to make the best offer or proposal to take control of your outstanding tax debts.

Remember that COVID-19 does not alter the tax laws, so all taxpayers should continue to meet their tax obligations as normal.

The take away from this – use the California government’s downtime to your advantage to prepare for the future.

Click here for COVID-19 Tax Relief measures instituted by the IRS in “The IRS People First Initiative” that can benefit you.

What Should You Do?

You know that at the Law Offices Of Jeffrey B. Kahn, P.C. we are always thinking of ways that our clients can save on taxes. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Orange County (Irvine), San Diego County (Carlsbad) and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income. Also if you are involved in cannabis, check out what a cannabis tax attorney can do for you. And if you are involved in crypto currency, check out what a bitcoin tax attorney can do for you.