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Facing COVID-19, Md. Tax Dept Refunds Sales Tax Payments

By Daniel Tay · March 20, 2020, 3:59 PM EDT

Maryland businesses that paid their March sales and use taxes early can request refunds, the state tax department announced Friday, saying the measure was aimed at helping businesses deal with the economic fallout of the COVID-19 pandemic.

State Comptroller Peter Franchot said in a bulletin that sales and use tax payments normally due on March 20 will not need to be paid until June 1. The extension also applies to certain business filings for sales and use tax; withholding tax; admissions and amusement tax; and alcohol, tobacco and motor fuel excise taxes that are due in March, April and May.

Interest and penalties will be waived for businesses filing and paying by the new deadline, Franchot said. The comptroller previously extended other business-related filing deadlines in March, April and May to June 1, including those for sales and use tax, withholding tax and a variety of excise taxes and fees.

Franchot also said his office will provide a three-month extension of personal and corporate income tax filings and payments, from April 15 to July 15. This is an expansion of the actions the office said it would take Wednesday.

At that time, the office said it would follow the federal three-month payment extension offered as relief from the impact of COVID-19, the disease caused by the novel coronavirus. At the federal level, though, the filing deadline then remained April 15, and taxpayers would have to claim a federal extension that would automatically extend to their state filing deadline.

The situation at the federal level has since changed, as Treasury Secretary Steven Mnuchin announced Friday that the 2019 tax return filing deadline for individuals and businesses will be moved from April 15 to July 15 in light of the pandemic. Lawmakers had pressed the administration to extend the filing deadline as well as the payment deadline.

The IRS' Wednesday notice pushed back to July 15 the tax payment deadline for people and pass-through businesses with tax liabilities of less than $1 million and corporations with tax bills of up to $10 million. That notice, however, left in place the April 15 tax return filing deadline.

The American Institute of Certified Public Accountants and others had criticized the decision as not addressing the practical challenges faced by taxpayers and preparers in light of the pandemic. Lawmakers in Congress on Thursday introduced legislation to push the filing deadline to July 15.

The Maryland Chamber of Commerce, which bills itself as the state's only statewide business advocacy organization, did not respond to requests for comment.

--Additional reporting by Joshua Rosenberg and Abraham Gross. Editing by Robert Rudinger.

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