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Illinois defers sales tax payment for small restaurants and bars

Mar 20, 2020

On March 19, 2020, Illinois Governor J.B. Pritzker authorized a delay in the required payment dates of Illinois sales tax for bars and restaurants who owed less than $75,000 in Illinois sales tax during calendar year 2019.

This was done to help Illinois retailers who operate eating and drinking establishments ease their cash-flow concerns. The governor had, on March 15, ordered all restaurants and bars to close through March 30 in response to COVID-19.

Illinois sales tax returns (Form ST-1) are still required to be filed on time for the February, March and April 2020 periods. However, payments for those periods may be deferred without interest or penalty. Illinois sales tax payments for those months may now be paid to the state over a four-month period, with 25% of the total sales tax due for those months being paid equally on May 20, June 22, July 20 and August 20, 2020.

Full payment is required for liabilities beginning with the May 2020 reporting period, which is due June 22, and for all following reporting periods.

Further details regarding this sales tax payment deferral program are available in Illinois Informational Bulletin FY 2020-23 (“Short-Term Relief from Penalties for Late Sales Tax Payments Due to COVID-19 Virus Outbreak”).

Due to timing of this announcement, it may already be too late for many Illinois restaurants and bars to hold back the payment of February sales tax, which is due on March 20, 2020. Although the State has not offered any guidance in this regard, it would be logical for the state to allocate that payment first to the 25% payment now due on May 20, with any remaining balance being applied first to the June 22  payment and the balance to July 20 and finally to the August 20 installment.

The Illinois Department of Revenue should automatically grant this relief to qualifying businesses.

If, however, you receive a notice for failure to timely pay, and you believe you qualify, please contact your Wipfli business advisor.

Author(s)

Macklin_Jessica
Jessica L. Macklin, CPA
Senior Manager
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Richard Salter
Richard J. Salter, CPA, JD, LL.M.
Partner, Tax
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