News and Insights

States Provide Taxpayer Relief in Response to Natural Disasters

Tax Development Oct 28, 2016

Nature has wreaked havoc on several states recently. In response, these states have taken steps to provide relief to taxpayers. Here is just some of the activity we’ve seen:

The state of Mississippi announced it will follow the federal extensions granted to Florida, Georgia, North Carolina, and South Carolina in response to Hurricane Matthew. Taxpayers located in these federally designated disaster areas have until March 15, 2017 to file individual income, corporate income, and pass-through entity tax returns due on or after October 4, 2016 and before March 15, 2017. Automatic penalty and interest relief will be extended by the Department on original or extended filing and payment dates that fall within this period. However, this extension does not apply to prior liabilities. See Mississippi Department of Revenue, Notice 80-16-004 for further information.

South Carolina
The state of South Carolina offers the following relief to taxpayers impacted by Hurricane Matthew:

  • Filing Extension: Taxpayers have until March 15, 2017 to file returns originally due from October 4, 2016 until March 14, 2017.
  • Collection Suspension: Collection of any assessed taxpayer liability will be suspended.
  • Waiver: Penalties and interest due as a result of any extensions or suspension of collection activities will be waived.
  • Free Copies: Replacement copies of tax returns destroyed due to Hurricane Matthew will be provided at no charge if requested by taxpayer.

Further details and an updated list of counties impacted by Hurricane Matthew can be found in South Carolina Information Letter 16-12.

The state of South Carolina also offers special registration and tax exemptions to out-of-state businesses entering the state to perform infrastructure-related disaster work. Qualifying businesses are exempt from all state and local business licensing and registration requirements and are not required to register, file, or remit state and local taxes or fees on any equipment used during the disaster period. To qualify, these out-of-state businesses must have received a request from the state of South Carolina or a local government within the state of South Carolina to provide services related to infrastructure damaged by Hurricane Matthew. Qualifying services include, but are not limited to the following:

  • Communication networks
  • Water pipelines
  • Public roads and bridges

Additional information can be found in South Carolina Information Letter 16-13.

North Carolina
The North Carolina Department of Revenue issued a press release, stating that in an effort to provide relief to taxpayers who are unable to meet filing deadlines due to Hurricane Matthew, it would be waiving penalties and interest associated with those returns. The Department further announced that it will be providing additional details regarding the filing extensions and filing responsibilities of impacted taxpayers and will also be providing information for taxpayers impacted by Hurricane Matthew, but not located in federally designated areas, at a later date.

Last week, the state of Georgia issued a press release announcing that it is extending the filing deadline for individuals impacted by Hurricane Matthew. The new deadline is March 15, 2017. Individuals and businesses whose principal place of business is located in the designated disaster area qualify for the extension. The extension applies to return filing, tax payment, and other time-sensitive requirements that have an original or extended due date falling between October 4, 2016 and March 14, 2017. Further information can be found in the Department’s October 17, 2016 press release.

The state of Hawaii suffered heavy rain and flooding in September that caused significant damage in Maui and Kalawao counties. The counties have been declared federal disaster areas. Recognizing this damage may impact taxpayers’ ability to meet their tax obligations, the Department has stated it will consider extension requests by taxpayers on a case-by-case basis. Other relief available to affected taxpayers includes casualty loss deductions and an exemption from gross receipts tax applicable to insurance proceeds. Additional information can be found in Hawaii Department of Taxation Announcement No. 2016-08.