What is the Law?
California businesses reporting less than $1 million in sales tax on a return may take a three-month extension on payments and returns originally due between December 1, 2020, and April 30, 2021. Eligible businesses are not required to make a request to the CDTFA for this extension. Businesses with a liability of $1 million or more must request for an extension with the CDTFA & will be evaluated on a case-by-case basis.
What is the rollout timing?
Eligible businesses are able to take advantage of this deferral immediately. Returns and payments originally due between December 1, 2020, and April 30, 2021, can be deferred for 3 months.
Below is a breakdown of each payment’s original due date and extended due dates.
What are the penalties if not followed?
Interest and penalties will not accrue on return amounts due, provided payments are made and returns are filed within three months of the original due date. Returns and payments filed and paid after the three-month extension will be subject to penalties and interest.
How does deferring sales tax payments impact my business?
Sales tax filing & payment extensions may offer the business temporary relief, however, the tax collected will still be due to the state, just at a later date. The extension does not apply to the second quarter of 2021. Therefore, the prepayments & quarterly returns for the second quarter of 2021 are due on the normal due dates. This will create a situation wherein two sales tax payments will be made during the months of May, June, and July in 2021.
How can RSI assist?
If you would like to OPT-IN on the payment & filing extension for the 4th quarter 2020 & 1st quarter 2021, please contact your RSI Tax Specialist via a support request. Please specifically indicate which payments & returns you would like to take the sales extension on. RSI will then file & pay the taxes on the specific extended due dates.