SALT Strategies

New York State Provides Limited Penalty Relief For Sales Tax Vendors

In the wake of declaring a State Disaster Emergency, New York Governor Cuomo has issued an executive order expanding the Tax Commissioner’s authority to abate late filing and payment penalties to also allow the Commissioner to abate interest on quarterly sales and use tax filings and remittances with a due date of March 20, 2020 for those who were unable to timely file and pay as result of the COVID-19 virus.

New York State Notice N -20-1

To provide guidance the State issued New York State Notice N-20-1. The Notice sets forth the prerequisites, limitations and procedures for those affected sales tax vendors.

The Notices states that this one time relief from late filing and payment penalties will address the following sales tax vendors:

  • Taxpayers who were unable to meet tax filing, payment, or other deadlines because key employees were treated or suspected to have COVID-19;
  • Taxpayers whose records necessary to meet tax filing, payment, or other deadlines are not available due to the outbreak;
  • Taxpayers who have difficulty in meeting tax filing, payment, or other deadlines because of closure orders or similar business disruptions directly resulting from the outbreak; and
  • Taxpayers whose tax practitioners were unable to complete work to meet tax filing, payment, and other deadlines on behalf of their clients due to the outbreak.

In order for affected Taxpayers seeking relief to qualify for the aforementioned penalties abatement, sales tax returns must be filed and the amount due must be paid within 60 days of the due date, i.e. March 20, 2020 for this relief to apply.

Exception

Sales Tax Vendors who are required to file returns on a monthly basis and participants in the Promptax program for sales and use tax or prepaid sales tax on fuel are not eligible for this relief.

Relief Request Procedures

Per the Notice, Taxpayers seeking relief “may request relief by visiting the Department’s website at www.tax.ny.gov. From the Department homepage, taxpayers can click on Tax Department response to novel coronavirus (COVID-19) to find instructions on how to apply for relief.”

Otherwise, Taxpayers that receive a penalty notice from the State for failure to file returns or make payments due March 20, 2020 are instructed to follow the instructions on the notice to request abatement of interest and late filing or late payment penalties that would otherwise apply.

Abatements of penalties and rate of interest on late payments not made by the date required by law or not covered by this announcement will be handled on a case-by-case basis.

In this exceptionally difficult time, we appreciate New York’s efforts to assist so many of us affected by the unprecedented challenges facing businesses. From your colleagues at Margolin, Winer & Evens LLP, we wish everyone be safe and well.