While many businesses are returning to normal, some are still struggling, and the upcoming sales tax deadline can make it feel worse. Earlier this year, businesses that were unable to meet quarterly sales tax filing and/or payment requirements due to COVID-19 were able to have their deadlines extended to June 22, 2020, and have penalties and interest abated during this time period. However, no additional provisions have been made since to help business owners.
Under New York law, the next deadline for sales tax returns is September 21, 2020. All businesses that are required to collect sales tax must file a sales tax return regardless of whether they owe any sales tax. New York provides a Sales Tax Web File service which makes it easier to file taxes. For those that do not owe money, the tax department website provides instructions on how to file a sales tax no-tax-due return.
Businesses that do owe taxes but are unable to pay do have options. Taxpayers unable to pay their tax bills in full may qualify for an Installment Payment Agreement (IPA) or Offer in Compromise. An installment payment agreement allows businesses to pay their bill over time. An Offer in Compromise is where the tax department agrees to settle the tax debt for less than what is owed. In the case of a business, an Offer in Compromise is only available if the business is insolvent or discharged in bankruptcy.
In addition, businesses that owe taxes and voluntarily disclose it and pay their outstanding tax liabilities to the tax department, may be able to avoid penalties.
If you are anticipating tax problems or owe back taxes, it is important to act promptly. The tax department can go after bank accounts, real or personal property, wages, cash receipts, inventory, and other assets to collect taxes owed. It can also shut down a business for failure to pay sales tax, sell the property at auction, and revoke the business’s right to collect sales tax, effectively putting it out of business. A consultation with an experienced tax attorney can help save your business and reduce your potential tax liability.
Contact us to discuss your matter.