sales tax relief

Ryan Working, CPA, MST

Tax Director

Back in April 2020, the Governor allowed taxpayers to apply for sales tax penalty and interest relief for 90 days for any taxpayer reporting less than $1 million in sales on their sales tax return.

The Governor has now directed the California Department of Tax and Fee administration (CDTFA) to provide additional and expanded temporary tax relief for eligible small businesses impacted by COVID-19.   This temporary relief includes the following:

  1. Automatic three-month sales tax extension for taxpayers filing less than $1 million in sales tax. Interest and penalties will not accrue on the return amount due, provided payments are made and returns are filed within three months of the original due date.
  2. Effective December 1, 2020, small business taxpayers with less than $5 million in taxable annual sales, can apply to take advantage of a 12-month, interest-free, payment plan for up to $50,000 of sales and use tax liability.
  3. Businesses with $5 million or more in annual taxable sales in severely impacted areas (restaurants, bars, hair salons, and other highly impacted sectors) may also apply for this 12-month interest-free payment plan.

Please note this relief only applies to sales and use tax due on returns with original due date between December 1, 2020 and April 30, 2021.

If you’d like to discuss further about the new California sales tax relief, please click here to contact a WFY tax advisor.