Video: Payment Deferral on Massachusetts Sales and Meals Taxes
In an effort to ease the financial burden on businesses effected by COVID-19, Massachusetts has announced an extension for remitting taxes collected on meals, sales or occupancy. This may provide some cash flow relief particularly to businesses in the restaurant and hospitality industries, among others. Managing Partner John D. Geraci, CPA, MST discusses some of the intricacies of this temporary rule.
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Full Transcript:
Hi, this is John Geraci managing partner at LGA. And we wanted to take a couple of minutes today to talk to you about some new legislation that is expected to be finalized tomorrow with respect to Mass sales meals and occupancy tax that is typically remitted to the government monthly. Massachusetts has announced that it’s going to provide some relief with respect to this for any taxpayer who on an annual basis collects $150,000 or less of meals, sales or occupancy taxes. It’s important to note that this is really just a borrowing of money that you’ve collected from consumers on behalf of the Mass DOR and you’re going to be remitting it to the DOR. You will still have the same obligation to remit it, but they’re providing an extension of time. So for any taxes that would have ordinarily been remitted with respect to these three categories in March, April and May will now be due and payable on June 20th, 2020 and this is intended to provide some cashflow relief related to the unexpected, results effecting your business from COVID-19.
So to the extent that you’re able to take advantage of this deferral, but still meet the obligation on June 20th, then it’s clearly a significant opportunity for a small business who are struggling right now. The rough estimated revenue that you can have in order to take advantage of this is just North of 2 million. So it doesn’t apply to all businesses. It’s important for you to pay attention, uh, to the thresholds to make sure that you are in fact protected and that you will not be assessed to the interest and penalty. Should you wait till June 20th to remit, please continue to check out our series on YouTube with respect to how we can support you through COVID-19. Thank you.