Governor Newsom Grants Additional Relief for Business Taxpayers

Small Businesses Now Have Until July 31, 2020 to File First Quarter Returns

On March 31 In accordance with the Executive Order issued by Governor Newsom last night to expand tax relief for small business taxpayers, the California Department of Tax and Fee Administration (CDTFA) announced today that all small businesses will have an additional three months to file returns and pay taxes administered by the department. Additionally, all businesses will have an extra 60 days to file claims for refund from CDTFA or to appeal a CDTFA decision to the Office of Tax Appeals.

CDTFA is providing a three-month extension for a tax return or tax payment to any businesses filing a return for less than $1 million in tax. For the approximate 99.5% of business taxpayers below the $1 million threshold for their current California sales and use tax obligation, returns for the 1^st Quarter 2020 will now be due on July 31, 2020. The same provisions apply to the other tax and fee programs administered by CDTFA. Qualifying taxpayers are not required to file a request for extension or request relief from penalty or interest. This automatic extension will remain in effect through the reporting of taxes and fees due on or before July 31, 2020.

“This expands on the relief previously granted to small businesses, giving them an extra 90 days to file and pay any business taxes and fees administered by CDTFA without incurring any penalties or interest,” said Director Nick Maduros. “By including the $1 million threshold, we’re able to offer much-needed relief to small businesses across the state while still maintaining the integrity of our local finance system. Approximately 55% of the sales and use tax collected goes back to our cities and counties, which count on this revenue to provide essential public services.”

In addition to the three-month extension of time to file and pay taxes, the Executive Order issued by Governor Newsom last night also provides business taxpayers with additional time to file claims for refund and appeals to the Office of Tax Appeals. Taxpayers looking to make refund claims with CDTFA during this period will have an additional 60 days to file. Similarly, taxpayers seeking an appeal of a CDTFA tax determination to the Office of Tax Appeals will have 60 additional days to file the appropriate request.

Additional information on the relief offered can be found at www.cdtfa.ca.gov/services/covid19.htm. Taxpayers who need additional help or have questions are encouraged to contact CDTFA by:

• Visiting the CDTFA website to find answers on specific topics;
• Phoning the Customer Support Center at 1-800-400-7115 (Monday through Friday, 8:00 a.m. to 5:00 p.m. Pacific Daylight Time, except state holidays);
• Calling or emailing a local CDTFA office;
• Emailing or chatting with the CDTFA regarding their general, non-confidential tax questions;
• Following CDTFA on Facebook, Twitter, LinkedIn, and Instagram for the latest information;
• Watching “How To Videos” and other online instructional resources; or
• Writing a letter by mail.

To find the latest information on CDTFA’s COVID-19 efforts, visit www.cdtfa.ca.gov/services/covid19.htm. For information about California’s COVID-19 efforts, visit covid19.ca.gov.

About:

The California Department of Tax and Fee Administration (CDTFA) administers California’s sales and use, fuel, tobacco, alcohol, and cannabis taxes, as well as a variety of other taxes and fees that fund specific state programs. CDTFA-administered programs account for more than $70 billion annually which in turn supports local essential services such as transportation, public safety and health, libraries, schools, social services, and natural resource management programs through the distribution of tax dollars going directly to local communities.

CDTFA Offers Immediate Interest-Free Payment Plans

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

On April 3 Governor Newsom today announced a new relief effort that gives 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. Today’s action builds on Executive Order N-40-20, issued by Governor Newsom on March 30, 2020, which provided all small business taxpayers an additional 90 days to file and pay taxes administered by the California Department of Tax and Fee Administration (CDTFA).

Under the program released today, qualifying businesses can enter into payment plans to distribute up to $50,000 of sales tax liability over a 12-month period, interest-free. 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.

“Small businesses are the backbone of California’s economy. Our hope is that these interest-free payment plans provide a much-needed bridge until small businesses can get up and running,” stated Director Nick Maduros. “The Governor’s action today allows small business owners to spread out their financial obligations over a full year, without paying any interest or penalties.”

Businesses not within these parameters can contact our CDTFA Customer Service Center at 1-800-400-7115 or their local CDTFA office. CDTFA retains administrative flexibility to assist businesses needing relief in the case of disasters.

The payment plans are in addition to the previous assistance CDTFA has rolled out to small businesses for any taxes and fees administered by CDTFA:

• Providing a three-month extension for a tax return or payment to any businesses filing a return for less than $1 million in tax. For the approximate 99.5% of business taxpayers below the $1 million threshold for their current California sales and use tax obligation, returns for the 1st quarter 2020 will now be due on July 31, 2020.

• All businesses will have an extra 60 days to file claims for refund from CDTFA or to appeal a CDTFA decision to the Office of Tax Appeals.