Governor Newsom Grants Additional Relief for Business Taxpayers

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

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 a 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.

• The California Office of the Small Business Advocate is available to help businesses identify resources and obtain answers to key questions (to the extent known):  https://business.ca.gov/advantages/small-business-innovation-and-entrepreneurship/how-we-can-help/ 
• The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.  Once a declaration is made for designated areas within a state, the information on the application process for Economic Injury Disaster Loan assistance will be made available to all affected communities as well as updated on their website: http://SBA.gov/disaster.
• Small businesses looking for honest advice about business operations during the COVID-19 emergency can rely on the 70 business assistance centers operating throughout California.  These business assistance centers offer free one-on-one business counseling, including the discussion of options for accessing capital:  https://static.business.ca.gov/wp-content/uploads/2019/12/2019-TA-Providers-Guide.pdf
• At California’s Small Business Finance Center, small businesses can access a range of financial products, including loan guarantees and direct loans:  https://www.ibank.ca.gov/small-business-finance-center/
• California maintains two credit enhancement programs to help small business obtain loans from traditional and nontraditional lenders, including the Small Business Loan Guarantee Program and a Small Business Loss Reserve Program.
  
• Employers experiencing a hardship as a result of COVID-19 may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit state payroll taxes without penalty or interest. A written request for extension must be received within 60 days from the original delinquent date of the payment or return.  For questions, employers may call the EDD Taxpayer Assistance Center.  Toll-free from the U.S. or Canada: 1-888-745-3886
• GO-Biz main COVID-19 resource webpage with links to the IBank, Small Business Advocate, State Treasurer, Labor and Workforce Agenct, Franchise Tax Board, and Department of Tax and Fee Management:  https://business.ca.gov/coronavirus-2019/ 

• The federal Center for Disease Control and Prevention provides guidance for businesses and employers here.
• The federal Small Business Administration is opening its Economic Injury Disaster Loan Program, among other resources.  More information is available about loans, contracting opportunities, and other resources available here.