Tax deadlines for small businesses to be further delayed

Small businesses in Massachusetts hit hard by the government’s economic shutdown, particularly restaurants and lodgings, will now have until May 2021 to pay some state taxes that accrued from March 2020 through April 2021, Governor Charlie Baker and legislative leaders announced.

Through emergency regulations to be issued by the Department of Revenue, state government plans to further delay tax deadlines for small businesses, some of which have not been allowed by the state to reopen since first closing in the spring. Sales, meals, and room occupancy taxes for qualifying businesses for March 2020 through April 2021 will not be due until May 2021, and businesses that wait will not face any penalties or interest. Without the change, those taxes would have been due this month.


Any businesses that paid less than $150,000 in regular sales plus meal taxes or less than $150,000 in room occupancy taxes in the year ending Feb. 29 will qualify for relief. Businesses that do not qualify but have meals tax and room occupancy tax obligations will have late-file and late-pay penalties waived, the administration said.

Tax relief is a topic frequently debated over the years in the Legislature but this new round of relief was the latest example of the governor taking unilateral action to address the effects of the pandemic, which has prompted a wave of restaurant closures with more expected as fall and winter approach.

Last year, the House started a working group to find ways to promote the state’s restaurants and culinary culture, but that panel was repurposed as a Restaurant Recovery Commission when the COVID-19 pandemic hit and the government’s mitigation efforts dealt a devastating blow to the restaurant industry.

Earlier this week, Salem Senator Joan Lovely filed a bill with the backing of House assistant minority leader Representative Brad Hill meant to help businesses that are unable to reopen access property tax relief.


The bill specifically seeks to help businesses in Phase 4 of the Baker administration’s reopening plan. Those businesses, which include bars, wedding venues, and theaters, are not expected to be allowed to reopen until there is a vaccine or significant breakthrough in COVID-19 treatment, the governor has said.

Any business designated as part of Phase 4 would be allowed to “apply for a real estate tax abatement during any quarter of the fiscal year” under Lovely’s bill and the state would be on the hook to make up the difference in what a city or town receives as a result of an abatement obtained under the bill. The authorization would expire 90 days after the governor’s state of emergency order lapses or is lifted.

“Local companies and hard-working employees form the backbone of every Massachusetts municipality,” Lovely said. “I know every establishment wants to open again, but until we can safely do so I want to help businesses and their workers by giving them badly needed relief on the tax side so that they can hang on until Phase IV begins.”

Peabody Representative Tom Walsh, who joined Lovely and Hill at a Topsfield wedding venue Monday to unveil the bill, said that while many businesses have been creative in finding ways to stay afloat during the pandemic, Phase 4 businesses “don’t even have that opportunity.”