States across the country are facing similar issues amid the pandemic: many stores are closed or have reduced sales so sales tax revenue has decreased. While some businesses have been able to offer take out or delivery during this time, many others have had to shut their doors for months because they were deemed ‘non-essential’. This has taken a huge toll on tax revenue flowing into New Jersey and many other states.
In New Jersey, as of May 18th, certain restrictions were lifted allowing some non-essential work to proceed. Retail stores can begin to offer curbside pickup options but still aren’t allowed to let customers into the store. Non-essential construction work can commence. Options that were not available a few weeks ago are now a reality.
While some may think the reopening has to do with financial reasons, states are pushing back saying that they are easing up due to improved virus data. It is hard to know which is true considering New Jersey alone lost an unprecedented $3.5 billion of revenue in April.
For New Jersey, income tax is another main component of their budget that they have had to do without. New Jersey followed the federal government and extended the filing date to July 15th. Where the state would normally receive income tax revenue in April, this leaves a three month gap in resources as income tax payment due dates have been extended to July 15th.
This is certainly an unprecedented time, with each state figuring out how to deal with this lost revenue for months or years to come.
If you have questions about your state and local tax (SALT) requirements, contact our team today!