Numerous state and local jurisdictions have responded to the COVID-19 (“coronavirus”) outbreak by providing relief to taxpayers, primarily through extended filing and payment deadlines. We expect that many more jurisdictions will issue guidance in the coming weeks, particularly because the federal government recently announced its 90-day income tax payment extension plan.
The Delaware Department of State recently sent a new round of letters to companies they identified as likely not being in compliance with Delaware’s unclaimed property laws. The purpose of these letters is to invite the companies into the state’s unclaimed property voluntary disclosure program (“Program”). If the company decides to not enter the Program, there is risk of audit. Below is a high-level overview of the Program, as well as certain considerations that must be weighed in response to the invitation letter.
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.
In response to the federal $10,000 cap on the state and local tax deduction, New Jersey recently enacted an elective pass-through entity tax. By taxing pass-through entities, the law shifts the tax burden from individuals subject to the federal deduction limitation to entities that are not subject to the limitation, which deduction then flows through to the pass-through entities’ owners without limitation. While uncertainty remains about the federal deductibility of such state pass-through entity taxes by individual owners, New Jersey joins a growing number of states to pass similar legislation in the wake of the SALT deduction cap, including Connecticut, Louisiana, Oklahoma, Rhode Island, and Wisconsin.