Multistate: States and legislatures respond to COVID-19

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In light of the COVID-19 pandemic, many states and localities have issued guidance on extensions of time to file and pay upcoming state and local taxes.  There is legislation pending or recently signed in a few other states, New Jersey, Ohio, and Pennsylvania, addressing the extension and payment issues.  In addition, a few states are starting to speak out on other tax issues resulting from COVID-19. At least one state, Indiana, has addressed the use tax consequences of businesses making donations of goods to fight the pandemic. In Indiana, Governor Eric Holcomb signed Executive Order 20-05, which contains a provision for use tax relief on donated items. Subject to Department approval, manufacturers making donations of medicine, medical supplies, or other goods used in fighting COVID-19 will not be subject to Indiana use tax on the items donated. Groups or organizations that are not manufacturers that make similar donations will not incur a use tax obligation if sales tax had not been paid on such items. The order notes that in either instance, such donations will not be construed to be a retail transaction subject to sales or use tax. However, the donor will also not be entitled to a refund of any sales or use tax previously paid to the department or to a vendor on the donated items.  The Mississippi Department of Revenue, in a recent tweet, addressed tax consequences of employees sheltering in place. The Department will not use any changes in the employees’ temporary work location to impose nexus or alter any income apportionment while those temporary telework requirements are in place. Rather than report each and every state and local update in TWIST, we are providing a link to a cumulative summary of the jurisdictions that have recently issued guidance on extensions of time for filing and payment of income, sales and/or other state taxes, or penalty relief in light of COVID-19.  

To read about recent state and local tax guidance in response to COVID-19, please click here and bookmark KPMG TaxNewsFlash-United States to stay current as more guidance is regularly released.