Post-COVID State Tax Policy Changes

In addition to addressing immediate needs, the American Rescue Plan intends to bolster future economic growth. It signals a shift away from stopgap measures and toward long-term planning and policy changes, a move states are starting to make, too.

Former President Trump marked the end of his presidency by signing the fifth COVID-related economic relief bill into law at the end of 2020. His successor President Biden just signed the sixth — his first, but perhaps not his last.

New and Ongoing Sales Tax Relief Measures

Most sales and use tax relief programs created by states in 2020 have expired, but there are a few exceptions. Two examples include:

1. California extended a program that provides 12-month, interest-free payment plans
2. Massachusetts extended certain sales and use tax as well as occupancy excise tax filing and payment deadlines to May 20, 2021

Several states are also developing new state tax relief programs. Some focus on the hardest-hit industries, like Colorado’s limited state sales tax deduction for qualifying bars, restaurants, and mobile food vendors. Others provide broader aid: