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.
Massachusetts recently joined a handful of other states (read: States over the Edge and Testing Boundaries with Business Activity Tax Nexus) by issuing a final revised regulation adopting a bright-line, $500,000, nexus threshold for its corporate excise tax. See generally 830 CMR 63.39.1. Echoing the language of the Wayfair decision, the state’s revised nexus regulation provides that “the Commissioner will presume that a general business corporation’s virtual and economic contacts subject the corporation to the tax jurisdiction of Massachusetts under M.G.L. c. 63, § 39, where the volume of the corporation’s Massachusetts sales for the taxable year exceeds five hundred thousand dollars.” 830 CMR 63.39.1(3)(d).
On June 5, 2019, the Illinois legislature enacted Public Act 101-0009 which includes comprehensive amnesty programs covering taxes administered by both the Illinois Department of Revenue (the “Department”) and the Office of the Secretary of State of Illinois (the “Secretary of State”). Taxes covered by these programs include the corporate and individual income taxes, the Retailers’ Occupation Tax, the Use Tax, and the Illinois franchise tax. The amnesty programs run for the period October 1, 2019 through November 15, 2019, and, under both programs, 100% of penalties and interest will be waived in exchange for payment of any outstanding tax liability due. Unlike previous amnesty programs, taxpayers will not be punished for not participating — that is, Illinois will not impose double penalties and double interest on tax assessments issued after the amnesty period closes.
On June 12, 2017, Congressman Jim Sensenbrenner (R-WI) reintroduced into Congress H.R. 2887, also known as the “No Regulation Without Representation Act of 2017” (the “Legislation”), which codifies the physical presence nexus requirement established by the U.S. Supreme Court in Quill v. North Dakota, 504 U.S. 298 (1992) (“Quill”). The Legislation is interesting for several reasons: (1) it proposes to employ a result that is the exact opposite of the recent trend to overturn Quill; (2) it defines “tax” broadly to include net income and business activity taxes; and (3) it expands the law to require a physical presence for states to regulate a person’s activity in interstate commerce outside of the tax context.