SURVEY: State-by-State Tax Relief Options for Cannabis CompaniesApril 10, 2020 – Alerts
Doors to financial assistance offered through the CARES Act loan and grant programs are mostly closed to cannabis businesses due to their legal status at the federal level. Therefore, in the COVID-19 economic downturn, it’s essential for these companies to take full advantage of any tax relief or extension programs offered through the CARES Act, by the federal government or by the states.
Many states have followed the federal government's lead of extending filing and/or payment deadlines by three months. But the devil is in the details here. It's essential to be sure precisely which filings are delayed and when payments must be made.
Below is a state-by-state guide to tax relief programs and tax extensions in jurisdictions with a legalized cannabis industry. (For alternatives to SBA Loans, see our prior alert with a state-by-state guide to loan programs that cannabis businesses can access outside the federally backed programs.)
Alaska does not have an income tax and has not extended the tax filing deadline or waived any penalties or fees associated with late payments or filings for other tax obligations.
The Arizona Department of Revenue extended the deadline for filing and paying state income taxes from April 15, 2020, to July 15, 2020, following the direction by Gov. Doug Ducey. This extension to July 15, 2020 is for individual, corporate, and fiduciary tax returns, and waives late filing and late payment penalties.
Gov. Asa Hutchinson extended the 2019 individual income tax filing date and individual income tax payment date from April 15, 2020, to July 15, 2020. The extension applies to 2019 returns of S Corporations, fiduciaries and estates, partnerships, and composite returns. The extension does not apply to 2020 estimated tax payments, sales and use tax, or special excise tax.
Gov. Gavin Newsom signed an executive order providing tax, regulatory, and licensing extensions for businesses. The order allows for a 90-day extension for tax returns and tax payments for all businesses filing a return for less than $1 million in taxes. It also extends the statute of limitation to file a claim for refund by 60-days to accommodate tax and fee payers.
Gov. Jared Polis extended the payment and filing deadline for all Colorado taxpayers’ state income taxes and estimated taxes. All income tax returns that were required to be filed by April 15, 2020, are granted an automatic six -month extension, and the filing is now due on or before October 15, 2020. The penalties for estimated payments are also waived until July 15, 2020. This extension and these waivers do not apply to payments due pursuant to a notice of deficiency, notice of final determination, demand for payment, installment agreement, closing agreement, or other agreement or requirement to pay. The relief does not apply to other returns, filings, or payments required to be made, including, but not limited to, employer withholding tax.
The filing and payment deadline for personal state income tax returns was extended by 90 days to July 15, 2020. The extension applies to estimated tax payments for the first and second quarters of 2020. The extension does not apply to employer withholding payments. Sales tax and room occupancy tax filers that reported $150,000 or less in tax during the period of January 1, 2019, through December 31, 2019, received an extension for both monthly and quarterly returns and payments. Sales tax and room occupancy tax returns and payments due March 31, 2020, and April 30, 2020, are extended to May 31, 2020.
The Delaware Division of Revenue extended the filing and payment of the following tax payments that would normally be due on April 15, 2020, to July 15, 2020: corporate tentative returns; personal income tax returns; fiduciary income tax returns; and estimated personal income tax payments. All interest and penalties are waived if paid by July 15, 2020. Taxpayers may request additional time to file through the Division of Revenue’s online system. This will provide an automatic extension to file to October 15, 2020. This additional extension does not apply to payments. Estimated personal income tax payments that are due on April 30, 2020, are extended to July 15, 2020; however, second quarter payments remain due on June 15, 2020.
District of Columbia
Mayor Muriel Bowser and Chief Financial Officer Jeffrey DeWitt extended the deadline for taxpayers to file and pay their 2019 District of Columbia individual and fiduciary income tax returns, partnership tax returns, and franchise tax returns to July 15, 2020. If you need more time than July 15, 2020, to file, a request for a six-month extension needs to be filed; however, it appears the extension request is still due on April 15, 2020, even though payment isn’t due until July 15, 2020. The District has been advising taxpayers to request an extension on April 15, 2020, and on July 15, 2020. Monthly and quarterly sales and use tax filers must file their returns as usual, but payments are not due until July 20, 2020. Failure to pay in full by July 20, 2020, will result in interest and penalties accruing from the original due date.
The Florida Department of Revenue extended the February 2020 tax reporting period to March 31, 2020, and the March 2020 tax reporting period to April 30, 2020. The extensions only apply to those tax payers adversely affected by COVID-19 and extended the deadline for any of the following taxes collected in March: sales and use tax; tourist development tax; new tire fees; rental care surcharge; prepaid wireless E-911 fee; lead acid battery fees; and dry-cleaning gross receipts. Adversely affected is defined as any one of the following: (i) the business closed in March 2020 in compliance with a state or local government order issued in response to COVID-19 outbreak and following the closure had no taxable transactions for the taxes listed above; (ii) the business experienced sales tax collections in March 2020 that are less than 75% of March 2019 sales tax collections; (iii) the business was established after March 2019; or (iv) the business is registered with the Department to file quarterly.
Gov. David Ige has extended the 2019 income tax filing and payment deadline to July 20, 2020, for taxpayers affected by COVID-19. For Affected Taxpayers, “properly estimated tax liability” must be paid by July 20, 2020, rather than April 20, 2020, and returns must be filed by October 20, 2020. Affected Taxpayers subject to penalties or additions to tax despite the relief granted by this Announcement may seek reasonable cause waivers. The relief provided is limited to Hawaii income tax payments and does not extend to withholding tax, franchise tax, public service company tax, general excise tax, transient accommodations tax, estate tax, or any other tax not specifically identified.
The 2019 income tax filing and payment deadline for all taxpayers who file and pay their Illinois income taxes on April 15, 2020 were extended to July 15, 2020. This applies to all individual returns, trusts, and corporations. This extension does not apply first and second installments of estimated tax payments for 2020 taxes that are due on April 15, 2020, and June 15, 2020.
The Louisiana Department of Revenue has extended the filing and payment deadline for 2019 income tax returns, partnership returns, consumer use tax returns, and franchise tax returns to July 15, 2020. Any extension beyond then will be to December 15,, 2020, for corporate returns and November 15, 2020, for individual, fiduciary, and partnership returns; however, interest and penalties will accrue beginning July 16, 2020, on any balance due. Additionally, the deadline for filing and payment for the February 2020 sale tax period is extended to May 20, 2020, but you must submit by LaTAP or paper filing.
Gov. Janet Mills extended the filing and payment of 2019 income taxes from April 15, 2020, to July 15, 2020. This includes any final and estimated state income tax payments due on April 15, 2020. Sales tax and payroll payments will continue as normal.
Maryland’s Office of Comptroller extended the filing and payment deadline for individual, corporate, pass through entity, and fiduciary income taxes to July 15, 2020. The state has waived all interest and penalties for filings and payments made by July 15, 2020. Fiscal and calendar year filers with tax years ending January 1, 2020, through March 31, 2020, are also eligible for the July 15, 2020, extension. Quarterly estimated payments that are normally due on April 15, 2020, are also extended to July 15, 2020. The time to file sales and use tax returns, and to make their accompanying payments, for sales taking place in February, March, and April of 2020 have been extended to June 1, 2020. The deadline for employer withholding tax payments has been extended to July 1, 2020.
The Massachusetts Department of Revenue extended the deadline to file and pay the 2019 state income tax, second installments of estimated taxes, estate and trust income taxes, and partnership composite return deadlines from April 15, 2020, to July 15, 2020. Corporate excise tax payments can be made until July 15, 2020, with no penalties, but interest will accrue beginning April 15, 2020. Tax payers that have previously filed their 2019 returns but have not made the associated payments have until July 15, 2020, to make such payments.
Gov. Gretchen Whitmer has extended the deadlines to file state and city income tax returns from April 15, 2020, and April 30, 2020, to July 15, 2020, and July 31, 2020, respectively. However, this extension does not apply to withholding taxes, sales or use tax, marijuana tax, motor fuel tax, motor carrier fuel tax, or any other tax this is not collected under the Michigan Income Tax Act or the City Income Tax Act.
The Minnesota Department of Revenue has extended the deadline to file and pay income taxes from April 15, 2020, to July 15, 2020. This includes all estimated and other income tax payments for tax year 2019 that would be otherwise due on April 15, 2020. This does not include estimated tax payments for state income tax due on April 15, 2020, for the 2020 tax year, corporation franchise, S-corporation, partnership, or fiduciary taxes. However, C-corporations receive an automatic extension to file their state return to the later of 7 months after the due date or the date any federal extension to file and S-corporations, partnerships, and fiduciaries receive an automatic extension to file their state return to the date of any federal extension to file. The payment due date has not changed. Businesses can request relief from late-filing or late-payment penalties and interest for reasonable cause, including emergency declarations by the President and Governor due to COVID-19.
Missouri’s Department of Revenue has extended the filing and payment deadlines for individual and corporate income taxes from April 15, 2020, to July 15, 2020. This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020. Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. Individuals and corporations that file their return or request an extension of time to file by July 15, 2020, will automatically avoid interest and penalties on the tax paid by July 15, 2020.
The Montana Department of Revenue has extended the deadline for state income tax filings and payments to July 15, 2020. Gov. Steve Bullock has also stated that the Department of Revenue will be lenient in waiving penalties and interest associated with late tax payments and that the Department will work with taxpayers on an individual basis.
The New Hampshire Department of Revenue Administration will offer relief from applicable interest and penalties for certain qualifying payers of business tax and interest & dividends tax impacted by the COVID-19 pandemic who are unable to pay an amount due on April 15, 2020, provided that payment of any remaining unpaid balance is made by June 15, 2020. This relief is available for any business tax or interest & dividends tax return or extension payment due on April 15, 2020, as well as any business tax or interest & dividends tax quarterly estimated tax payment due on April 15, 2020.
Taxpayers that qualify for this additional relief may still take advantage of the automatic seven-month extension to file a tax return under the circumstance described, as long as the extension payment is received by June 15, 2020, in an amount equal to either the tax year 2018 total tax liability or tax year 2019 total tax liability. The automatic seven-month extension to file the tax year 2019 return will be measured from the April 15, 2020 due date and will therefore be no later than November 15, 2020. Those qualifying taxpayers will have until June 15, 2020, to remit payment without typical penalties and interest. This extended due date is in addition to the expansion of the qualifications for the automatic extension and the estimate payment safe harbor.
Nevada does not have an income tax and has not extended the tax filing deadline or waived any penalties or fees associated with late payments or filing for other tax obligations.
The New Mexico Taxation and Revenue Department has extended the corporate income tax filing and payment deadline to July 15, 2020, and waived all penalties and fees associated with late payments as long as payments are received by July 15, 2020. Withholding taxes normally due on the 25th of March, April, May and June will now be due on July 25, 2020. Penalties are waived for the withholding tax payments; however, interest will incur as of the date it was due.
New York’s Department of Taxation and Finance has extended the filing and payment for state personal income tax, corporation tax and fiduciaries tax from April 15, 2020, to July 15, 2020. Taxpayers can defer all related tax payments, including installments of estimated taxes for 2020 tax year due on April 15, 2020, to July 15, 2020. If you cannot file your 2019 return by July 15, 2020, you can request an automatic extension to file. The personal and corporate return will be due October 15, 2020, if the extension request is filed by July 15, 2020, and you properly estimate and pay your 2019 tax liability with your extension request. The extension does not apply to any other state tax.
The North Dakota Office of State Tax Commissioner has extended the deadline for filing and paying state income taxes from April 15, 2020, to July 15, 2020, without penalty or interest. North Dakota filers may also request additional time if they are unable to file a return or pay the tax in a timely manner due to COVID-19. The waiver of penalty and interest through July 15, 2020, applies to all income tax, but does not apply to quarterly wage withholdings, sales tax or any other tax.
Gov. Mike DeWine extended the deadline to file and pay state income tax without penalty or interest for those filing the state individual income tax, pass-through entity and fiduciary income tax, and municipal net profit taxpayers. Returns, payments, and estimated payments that were due between April 15, 2020, and June 15, 2020, have been extended to July 15, 2020. This extension does not apply to any other tax return filing and payment due dates.
Oklahomans now have until July 15, 2020, to file and pay their 2019 state income tax return. This is applicable to income tax due from Tax Year 2019 and the first quarter payment for Tax Year 2020, both of which would normally be due on April 15, 2020. This extension does not appear to apply to sales or other taxes. Corporate taxpayers will be granted a deferment of up to $10 million of income tax payments that would be due on April 15, 2020, until July 15, 2020, without penalties or interest.
The Oregon Department of Revenue has extended the personal income tax and payment deadline automatically from April 15, 2020, to July 15, 2020. Estimated tax payments for tax year 2020 are not extended. The tax year 2019 six-month extension to file, if requested, continues to extend only the filing deadline until October 15, 2020. For corporate income/excise taxpayers, the state return filing and payment due date for tax year 2019 is automatically extended from May 15, 2020, until July 15, 2020. Payments for and returns due after May 15, 2020, are not extended at this time.
Pennsylvania Department of Revenue has extended the filing and payment for personal income tax, trust and estates, partnerships, and S corporation returns and payments until July 15, 2020. The extension applies to both 2019 tax returns and estimated payments for the first and second quarters of 2020. Corporate tax returns that would have been due on May 15, 2020 are now due on August 14, 2020. This is no extension for the June 15, 2020, estimated payment due date for corporations. The Department of Revenue has waived the accelerated sale tax prepayment for April sales tax payments, but businesses must remit the sales tax that they have collected in March 2020.
The Rhode Island Department of Revenue has extended the tax filing and payments normally due on April 15, 2020, to July 15, 2020. This includes C-corporation income tax and first quarter estimated payments. No penalties or interest will be applied to those who file and pay by the new deadline. The extension does not apply to any state tax filings or payments other than state income tax.
The Utah State Tax Commission has waived all interest and penalties for late-filed 2019 tax returns and payments for corporations and pass-through entities. To receive the adjustment, however, the returns and payments must be filed no later than July 15, 2020. The deadline for submitting sales taxes has not changed.
Vermont’s Commissioner of Taxes has extended the filing and payment due dates from April 15, 2020, to July 15, 2020 for personal income tax, corporate income tax, fiduciary income tax and state homestead declaration and property tax credit claims. This includes any 2020 estimated tax payments that were due on April 15, 2020. Additionally, local businesses that are unable to meet the March 25, 2020, and April 25, 2020, deadline for the sales and use tax payments will not be charged any penalty or interest on those taxes for late submissions.
On March 24, 2020, Gov. Jay Inslee issued an order that waived all penalties for late tax payments from cannabis businesses. The waiver was made retroactive to the date of the declaration of the state of emergency on February 29. The order does not waive taxes, but cannabis businesses will not be assessed a penalty for late tax payments. To be eligible for deferment, business must continue to submit timely sales reports and submit a request by email to [email protected].
The Department of Revenue has also extended the deadline for when businesses must pay their taxes. Annual filers had their due date pushed to June 15, 2020. Quarterly filers had their due date pushed to June 30, 2020. Monthly filers are required to request an extension by sending an email in their My DOR account or call the Department of Revenue.
The West Virginia State Tax Department extended the deadline for 2019 annual income tax return filing and payments for individuals, trusts or estates, and corporations from April 15, 2020, to July 15, 2020. The extension does not apply to any other tax collected by the Tax Commissioner including employer withholding tax returns and payments.