The West Virginia governor vetoed S.B. 163, which would require vacation rental platforms and hotel booking platforms to collect and remit local occupancy taxes. It is believed the veto is tied to technical concerns about how the localities are to collect the tax.

The bill passed the senate unanimously and the house by a vote of 95-3, meaning the legislature will likely have either the numbers to override the governor’s veto or the will to work on technical adjustments. The 2020 West Virginia legislative session ended March 7, so it is unclear at this time when or how this legislature issue will progress.

Calling all trivia fans! Don’t miss out on a chance to show off your SALT knowledge!

We will award prizes for the smartest (and fastest) participants.

Today’s Question
Which two states refer to their state taxing agency as “the Comptroller?”

E-mail your response to SALTonline@eversheds-sutherland.com.

The prize for the first response to today’s question is a $20 UBER Eats gift card.

Answers will be posted later this week. Be sure to check back then.

After nearly a decade of stalled litigation in Illinois state court, the U.S. Court of Appeals for the Seventh Circuit permitted a group of taxpayers to proceed in federal court with their U.S. constitutional challenge to property tax assessments, over Tax Injunction Act and comity objections by Cook County. While the district court held that the TIA barred the federal suit, the Seventh Circuit reversed noting that this is the rare case where there is not a “plain, speedy and efficient remedy” in Illinois courts. And, for similar reasons, the Seventh Circuit rejected the county’s argument that the appeals court should decline jurisdiction on the principle of comity.

Here, the procedural statute at issue, (35 ILCS 200/23-15(b)(3)), solely permits a taxpayer to challenge the correctness of a property assessment, without regard to an assessor’s methods or intent. The taxpayers were able to show the appeals court that the statute limited who the taxpayers could name as a defendant, what evidence they could present, and what arguments they could raise. Therefore, the Seventh Circuit concluded that the governing procedural statute effectively prohibits a taxpayer from raising an Equal Protection Clause challenge in state court because it ignores the assessor’s methods and intent, which are needed to meet the “no rational basis” test to prevail on such a challenge.

A.F. Moore & Associates, Inc., et al v. Maria Pappas, et al., Illinois Court of Appeals Case No. 19-1971 (Jan. 29, 2020).

On March 30, 2020, California Governor Gavin Newsom issued Executive Order N-40-20 (Order) regarding the state’s COVID-19 State of Emergency. The Order grants additional extensions to taxpayers and gives new authority to the California Department of Tax and Fee Administration (CDTFA) to provide relief from interest and penalties to taxpayers impacted by the State of Emergency. The CDTFA administers California’s sales & use tax, as well as over 30 other special tax and fee programs.

The Order provides that for taxpayers filing a return for less than $1,000,000 in tax, the CDTFA may suspend statutory rules requiring taxpayers to request a filing extension and file a statement under penalty of perjury for up to three months after the due date of the return or payment. The Order also extends the statute of limitations for taxpayers to file a refund claim with the CDTFA for 60 days. Additionally, the Order extends the time limit for taxpayers to appeal a CDTFA determination to the Office of Tax Appeals for 60 days. Each of these proclamations is effective from March 31, 2020 to July 31, 2020.

Our newest SALT associate, Annie Rothschild, might have had to start her new job working from home, but she does get a pretty great office-mate to work alongside with because of it. Meet Marlowe, a 1.5 year-old Goldendoodle. While she’s forced to work from home, Annie and Marlowe have gotten a chance to spend a lot more time together.

Annie and her boyfriend adopted Marlowe in December of 2018, when a local family’s dog had puppies. When searching for a cute and unique name, Annie was inspired by Raymond Chandler’s fictional character Detective Phillip Marlowe.

In-between conference calls and video chats, Marlowe enjoys cuddling on the couch, going on walks and chasing birds. The current work from home situation has Marlowe missing his friends. One of his favorite things to do is play with all of his dog friends.

Marlowe’s first birthday party was held at a local park, and he invited a few of his closest friends to join. The party included its own dog-exclusive birthday cake. After playing with the other dogs for a while, Marlowe ventured off on his own to find a large mud puddle. Marlowe LOVES mud. Before he could be stopped, Marlowe proceeded to lay down in the mud, covering himself almost completely in mud. It’s a moment that everyone considers the best day of his life so far!

We are thrilled to feature Marlowe as our March Pet of the Month!

The California Franchise Tax Board just issued Notice 2020-02, providing an extension to July 15th for taxpayers to file income/franchise tax refund claims, protests, or appeals and petitions for rehearing at the Office of Tax Appeals that would normally have statutory due dates during the “postponement period” of Mar. 12, 2020 to July 15, 2020.

The Notice also states that the FTB has until July 15th to issue Notices of Proposed Assessment where the statute of limitations is set to expire during the postponement period.

Last week we launched SALT Trivia to test your knowledge on state and local taxes. Thank you to everyone who participated!

Last Week’s Question:
Which state was the first to enact a general state sales tax?

The Answer:
Mississippi. Although a few states had some sales tax features prior to that date, Mississippi was the first state to enact a state sales tax in 1932.

Within a few years, more than half the states had adopted sales taxes. Currently, 45 states, including the District of Columbia, have some type of general sales tax in force. Alaska, Delaware, Montana, New Hampshire, and Oregon are the only states that have no general sales tax.

Keep an eye out for our next trivia question on Wednesday!

State and local tax jurisdictions continue to evolve their tax systems around the US. Analyzing the latest key decisions, legislative and regulatory changes, and revenue agency guidance, the Eversheds Sutherland SALT Team focuses on providing updates on the most important developments in US state and local tax.

We are pleased to announce the launch of our new podcast channel, A Grain of SALT, which will help tax professionals navigate growing challenges in the evolving tax systems of state and local jurisdictions.

Subscribe now.

On March 29, 2020, the New York State Department of Taxation and Finance issued Notice N-20-2, extending the April 15, 2020 due date for New York State personal income tax and corporation tax returns to July 15, 2020. The Notice was issued in response to Executive Order No. 202.12 which, among other things, authorized the Commissioner of Taxation and Finance to provide relief from certain tax filing and payment deadlines.

The Notice states that the extension applies to returns for individuals, fiduciaries (estates and trusts), and corporations taxable under Tax Law Articles 9, 9-A, and 33. In addition, the Notice states that taxpayers may defer all related tax payments originally due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed.

Taxpayers do not need to file any forms to request or apply for this relief.

The Notice further provides:

  • Payments of tax or installments of tax, including installments of estimated taxes for the 2020 tax year, will not be subject to any failure to file, failure to pay, late payment, or underpayment penalties, or interest if filed and paid by July 15, 2020. Interest, penalties, and additions to tax with respect to such extended tax filings and payments will begin to accrue on July 16, 2020.
  • Taxpayers who request an automatic extension to file a 2019 return by July 15, 2020 will have their due date extended to October 15, 2020 (or, in the case of fiduciary income tax returns, September 30, 2020).
  • Any direct debit payments scheduled with a previously filed 2019 return will not be automatically rescheduled to July 15, 2020—instead, a taxpayer must cancel and schedule a new direct debit payment.

The Notice identifies the following exceptions to the relief provided:

  • No extension is provided by the Notice for any other type of state tax, or the filing of any state information return.
  • Remittance of income tax withheld by employers required to be made using Form NYS-1, Return of Tax Withheld, must be made on time.

While the New York City Department of Taxation and Finance has not yet issued guidance automatically extending deadlines to file corporate tax returns, it has issued Finance Memorandum 20-2, allowing for a waiver of penalties for NYC Department administered business and excise taxes due between March 16, 2020, and April 25, 2020. Taxpayers may request to have penalties waived on a late-filed extension or return, or in a separate request. However, interest would be due on all tax payments received after the original due date.

Stay tuned for updates on New York State and City tax-related deadlines and relief provisions related to COVID-19.