The Washington Department of Revenue (WA DOR) recently published information regarding its response to the COVID-19 Pandemic and the State of Emergency in Washington State.
Effective February 29, 2020, through the end of the state of emergency, which is yet to be determined, the WA DOR has taken the following measures to provide relief to businesses impacted by COVID-19:
- Monthly Filers: The WA DOR requests that businesses still file their Monthly returns even if they are unable to pay. An extension may be requested for the payment of tax returns by sending a secure email through the taxpayers’ My DOR account or by calling the WA DOR’s main line tax assistance found under their contact page. We recommend that if a taxpayer calls the WA DOR, they request a written confirmation of the extension.
- Quarterly Filers: The Quarter 1, 2020 return due date has automatically been extended from April 30, 2020, to June 30, 2020.
- Annual filers: The Annual 2019 return due date has automatically been extended from April 15, 2020 to June 15, 2020.
The extension requests cover a broad range of taxes administered by the WA DOR, including:
- Business and occupation tax
- Real estate excise tax assessments
- Leasehold excise tax
- Forest tax
- Other taxes administered by the WA DOR
Upon request, the WA DOR will provide extensions for payment of tax returns. Requests made within 4 days after the due date of the monthly return will be considered timely requests and will qualify for the extension.
Retail Sales Tax
The WA DOR published guidance doesn’t specifically identify retail sales tax as a qualifying tax under the business relief program. Because sales taxes are trust fund taxes, having explicit written confirmation to delay payment of sales tax is paramount. Therefore, it’s highly recommended that taxpayers obtain written guidance through their My DOR account when requesting relief of filing and paying tax returns that include collected retail sales tax.
Taxpayers making retail sales of taxable property or services should likely continue to charge to customer’s sales tax, too, and taxpayers should consult with their tax advisors on any questions they may have related to these items.
Collections and Payment Plans
The WA DOR will delay issuing new compliance assessments until mid-April, when they’ll reassess the delay. This delay includes tax warrants, notices of withhold and deliver, and revocations.
Additionally, upon request, the WA DOR will work with taxpayers that are impacted by COVID-19 to adjust payment plan amounts or extend payment dates 30 to 60 days. If payment is extended, additional penalties that would have normally accrued during the extension period will be waived.
New or Ongoing Audit Activity
The WA DOR will delay until mid-May the scheduling audits of businesses that have gross income of less than $5 million in the past year or are a type of business specifically identified in the Governor’s proclamation. Specifically identified businesses can be found in the WA DOR’s alert.
For audits in progress, the WA DOR will work with taxpayers to either issue the audit or provide an extension of up to 60 days based on the taxpayer’s preference.
The WA DOR currently has the authority to waive interest through April 17, 2020. Further, the WA DOR will waive the Business License Service delinquency fee for late renewals through April 17, 2020. Penalties and interest accrued prior to February 29, 2020, will not be waived. There will be no refunds for penalties and interest paid during the state of emergency.
Property taxes aren’t included in the business relief program, and taxpayers should contact their local county treasurer or the WA DOR if they have questions related to property taxes.
We’re Here to Help
If you have any questions about what these changes mean for you or your business, please contact your Moss Adams professional.
For regulatory updates, strategies to help cope with subsequent risk, and possible steps to bolster your workforce and organization, please see the following resources: