Budget Amendment ID: FY2021-S4-72

OTH 72

Sales Tax Modernization

Ms. Lovely and Mr. Tran moved that the proposed new text be amended by striking out Section 19 and inserting in place thereof the following section:-

SECTION 19. Said chapter 62C is hereby further amended by inserting after section 16A the following section:-

Section 16B. Notwithstanding the due date of the return as set forth in section 16 or the payment date as set forth in section 32 or any other general or special law to the contrary, a payment of tax shall be made in advance of the filing of the return required under subsection (g) of said section 16 or subsection (h) of said section 16 not later than the twenty-fifth day of the last month of the filing period; provided, however, that such payment shall include either (i) the tax collected for any taxable sale made during the days in the filing period occurring on or before the twenty-first day of the last month of the filing period, or (ii) a minimum of 75% of the liability for the same calendar month of the preceding year; provided further, that this section shall not apply to operators whose cumulative room occupancy excise liability in the immediately preceding calendar year with respect to returns filed under said subsection (g) of said section 16 is not more than $150,000; provided further, that this section shall not apply to vendors whose cumulative sales tax liability in the immediately preceding calendar year with respect to returns filed under said subsection (h) of said section 16 is not more than $150,000; and provided further, that tax collected for any taxable sale made during the remaining days of the filing period for which tax was not previously remitted shall be remitted at the time the return for that filing period is required to be filed. Any advance payment shall be credited against the actual tax liability due on the return required for the period; provided further, that any portion of an advance payment that exceeds the actual tax liability for the month in which the liability occurred shall be allowed as a credit for the amount of tax overpaid and shall be immediately available for credit against a future tax liability of the operator or shall be refunded to the operator.

A penalty of 5 per cent of the amount of an underpayment shall be imposed, unless such underpayment is due to a reasonable cause; provided, however, that such penalty shall not be imposed if the payment made on or before the date prescribed under this section is not less than 70 per cent of the total tax collected during the filing period. For the purposes of this paragraph, the term “underpayment” shall mean the excess of the amount of the payment required under this section over the amount, if any, paid on or before the date prescribed therefor.

The department shall issue regulations and guidance necessary to implement this section.