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O
n September 22, the Connecti-
cut Department of Revenue
Services (DRS) informed the
CTCPA via email that "Beginning with
taxable year 2015, individual taxpay-
ers who had a Connecticut income
tax liability of $4,000 or more for tax-
able year 2013, and who are required
to, or voluntarily make estimated tax
payments for taxable year 2015, must
make such payments by electronic
funds transfer (EFT)."
The DRS sent a statement and a set
of FAQs explaining the details of the
new requirement on October 2 that
the CTCPA in turn disseminated to its
membership.
Subsequently, on October 15, the DRS
informed the CTCPA via email that it
was rescinding the requirement.
On October 17, the DRS posted the
following language on its website:
Recognizing the potential incon-
venience for taxpayers at this
time and limited benefit to the
state, DRS has determined that
(1) individuals will NOT be re-
quired to make estimated income
tax payments electronically and
(2) annual sales tax filers will NOT
be required to file or make pay-
ments electronically. Taxpayers
are still urged to take advantage
of the ease, speed and certainty
of filing and paying taxes through
the DRS on-line Taxpayer Ser-
vice Center (TSC) or by phone
through Telefile.
Upon receiving initial notification of the
change, a number of individual Society
members contacted both the DRS and
members of the General Assembly to
express their concern over the possi-
ble hardships this could create for tax-
payers. The CTCPA believes the deci-
sion reached by the DRS in rescinding
the electronic payment requirement
was most appropriate.
DRS Announces,
Rescinds Mandatory
e-Filing for 1040ES
A
ccording to legislation passed in the waning days of the 2014 session,
effective October 1, 2014, sales tax returns would have been due on
the 20th day of the month following the end of the reporting period for
both monthly and quarterly filers. However, implementation of this acceler-
ated timetable for sales tax filings has been delayed until sometime in early
2015, so CPAs and their clients still have time to prepare for and adjust to a
shortened reporting cycle. But it is coming!
CTCPA members William Barron, Yvonne Bruno, and Camille Murphy,
along with Executive Director Art Renner and contract lobbyist Craig Leroy,
met with Department of Revenue Services (DRS) Commissioner Kevin Sul-
livan and his senior staff on September 17, to discuss the new filing require-
ment and the expected hardship it would create for small business entities.
DRS leadership was unwilling to reopen consideration of the accelerated
timetable, noting that surrounding states had already moved to the 20-day
filing requirement, but they did agree to consider potential approaches to
mitigate the problems small business filers will face. The CTCPA members
in attendance at this meeting developed a list of recommendations for the
DRS; these were provided to the DRS at the end of September.
A listing of some of the more significant suggestions follows.
Phase-In Recommendations
(for the first year, the DRS is asked to consider):
No less than 90 percent of the estimated sales tax liability is due on the
20th day of the following month; the balance of the total due will be paid
with the filing of the return on the last day of the month.
Penalties will be waived for errors, late payments, and amended
returns.
Permanent Recommendations
(to ease the burden on small businesses):
Set a threshold for compliance, such as the $30,000 annual threshold ad-
opted by New Jersey. Filers with an annual amount below $30,000 would
file on a quarterly basis.
Provide a one-month exemption for the filings due in April due to the
other tax filings due on April 15.
Provide filers the ability to report on a cash basis to help small businesses
match receipts with required payments to the state.
Alternate Solutions:
Adopt the 20-day filing requirement for retail establishments only.
Stay on the end-of-the-month filing and payment cycle but require all
businesses to have a deposit with the DRS equal to 1/12 of the prior
year's liability. (This would put Connecticut in the same cash position but
avoid creating the extra compliance burden on the business community.)
What do you think?
Please take a few minutes to give us your assessment of the recommen-
dations provided to the DRS by completing the survey at www.ctcpas.org/
StateTax. This information may be useful as we continue our dialogue to al-
leviate the compliance complications of the shortened filing cycle.
We will continue to keep you apprised of further developments as this situ-
ation evolves.
Update on the Acceleration of Sales Tax Filings
>>
Important DRS Developments Affecting You and Your Clients
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