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Inside a tax preparation service.
Mississippians will be granted an extension to file and pay their state taxes because of the COVID-19 pandemic until May 15.
The May 15 extension is short of the 90-day extension, until July 15, granted by the Trump Administration to file and pay federal taxes.
In a news release, the Department of Revenue said the agency consulted with Gov. Tate Reeves and the legislative leaders before deciding on the 30-day extension.
On social media, the Mississippi Department of Revenue said the state “is unable to follow the federal July 15th income tax extension as this will have approximately a $555,000,000 impact to the state budget. This would shift these receipts from the current fiscal year to the next fiscal year.”
The state fiscal year ends on June 30. Taking $555 million out of the about $6 billion state general fund budget at this point in the fiscal year would have dire consequences. This especially considering the state rainy day fund or Working Cash Stabilization Fund contains about $680 million, according to a December report by the Legislative Budget Committee staff.
Unlike the federal government, which can run a deficit, various state laws, most experts agree, mandate that Mississippi government not to have a deficit. Plus, the federal fiscal year begins Oct. 1, meaning the 90-day extension to July 15 to file and pay taxes is confined to one fiscal year while it would carry over to two fiscal years on the state level.
People on the federal and state level, of course, can file before the deadlines and most likely will want to if they are receiving a refund.
The revenue department’s news release said the extension applied only to income taxes paid by individuals and businesses and not other types of taxes, such as the sale taxes reimbursed to the state by retailers.
In the coming months, legislative leaders and the governor are expected to have to deal with an overall reduction in state revenues caused by the coronavirus.