States continue to provide relief in response to the spread of the COVID-19 virus. This week, numerous states responded to the federal income tax filing extension, and we expect additional states to respond in the coming days. Some states are also offering relief for non-income business taxes, and much of the relief is limited to small- to mid-size businesses. Furthermore, COVID-19 is causing complications in property tax assessments, payments, and appeals.
Since our previous blog post, several more states have provided tax relief by extending filing and payment deadlines in response to the COVID-19 (“coronavirus”) outbreak. However, numerous state tax departments are also canceling in-person customer service, which could make it more difficult for taxpayers to receive timely answers to their filing questions. We are also seeing the continued impact of COVID-19 on state and local tax litigation as more state courts and administrative tribunals adjourn hearing dates or move to conduct certain proceedings remotely.
Several states continue to move forward with the taxation of digital advertising and new tax proposals have entered the fray. We last updated you on the attempts by Maryland, Nebraska, and New York. Nebraska had a hearing on its sales tax bill in February, with relatively little movement after that. In contrast, Maryland and New York have continued their move towards imposing taxes on digital advertising in some form and West Virginia has entered the mix.
The World Health Organization has officially declared the coronavirus outbreak to be a pandemic. In addition to the cost on human life, the rapid spread of COVID-19 has left a trail of economic damage affecting business revenues. COVID-19 has caused complete or partial shutdown of factories, supply chain disruptions, and labor shortages, and has impacted demand in certain industries. This impact will also be felt by U.S. state, and local governments.