Temporary Tax Relief For Small Business Owners
In response to the financial impact of the COVID-19 virus, Washington State has delayed payment deadlines for the Business & Occupation (B&O) tax owed by small businesses. Specifically, those who file monthly returns can request an extension from the Department of Revenue, while quarterly filers have an automatic extension to June 30, 2020 for their first quarter tax returns. Moreover, the annual 2019 return has been extended to June 15, 2020.
In addition to the State of Washington, multiple cities have also provided extensions to their local B&O tax deadlines.
The City of Seattle has extended the B&O tax filing and payment deadline for the first and second quarters of 2020 to October 31, 2020. The third quarter tax returns and payments are also due on October 31, 2020. This extension applies to small business who reported taxable income of $5 million or less in 2019. This extension does not apply to tax returns falling outside of the designated period, to delinquent returns prior to these periods, or to any other type of taxes, such as utility, admission, parking, sweetened beverage, gambling or firearm taxes due during this time period. The extension is automatic and requires no additional paperwork. The City of Seattle will not assess penalties or interest for qualified small businesses during this time.
The City of Bellevue has mirrored the City of Seattle in offering the same extension to October 31, 2020 for small business owners with gross receipts of under $5 million. The extension applies to the first and second quarters of 2020. Larger businesses in Bellevue can request to defer tax payments for up to 90 days in accordance with Bellevue City Code Chapter 4.03.
The City of Tacoma has provided an extension to small businesses who pay $10,000 or less in B&O taxes annually, and who pay on a quarterly basis. Qualified businesses will automatically be switched to a “Quarterly Deferred” tax status, and can defer their first, second, and third quarter B&O tax payments to January 31, 2021 without penalty or interest.
The City of Everett, on the other hand, has only indicated that it may temporarily waive penalties and interest upon request, and suggests that business owners check back on May 1st for additional information how to request a waiver.
It is critical that small business owners check the requirements of the cities in which they operate for guidance on B&O taxes. As shown above, not all cities have addressed the consequences of COVID-19 in the same fashion, and the list on this blog is not exhaustive.
The lawyers at Beresford Booth are ready to help small business owners address their ends in these difficult times and will continue to update this website with information regarding COVID-19 and its effects on businesses. Please feel free to contact us for any assistance.