September 2020 / United States

The World Trade Organization (WTO) has found the United States' additional ad valorem duties on certain products imported from China to be in violation of various articles of the 1994 General Agreement on Tariffs and Trade. Specifically, China disputed the following additional ad valorem duties imposed by the United States:

• additional ad valorem duties of 25%, imposed on 20 June 2018 on a list of 818 tariff subheadings with an approximate annual trade value of USD 34 billion of products imported from China, as of 6 July 2018 (List 1); and
• additional ad valorem duties, imposed on 21 September 2018 on a list of 5,745 tariff subheadings with an approximate annual trade value of USD 200 billion of products imported from China, as of 24 September 2018 (List 2).

List 2 set the rate of additional ad valorem duties at 10% until the end of the year, and announced that the rate of additional duties would increase to 25% on 1 January 2019. The increase in the rate of additional duties was postponed twice, but eventually took effect on 10 May 2019. The WTO rejected the United States' argument that the tariffs were applied to products it said had benefitted from practices that the United States considered to be contrary to "public morals," like theft, misappropriation and unfair competition. Ultimately the WTO found that the United States had not met its burden of demonstrating how its restrictions contributed to protecting its public morals and how they did not extend beyond what was necessary. To read the full report of the panel issued by the WTO see WT/DS543/R.

Taxpayers across the nation facing hardship in the aftermath of Hurricane Sally in the south-eastern United States and various wild fires in the western United States gain some relief from state revenue departments: Alabama extended 2019 filing deadlines for all filers in Baldwin, Escambia and Mobile counties affected by Hurricane Sally. Tax deadlines falling between 15 September 2020 and 15 January 2021 are pushed to 15 January 2021. Penalty relief is provided during the extension period. Alabama taxpayers not affected by Hurricane Sally must file and pay individual taxes by te extended deadline of 15 September 2020, or as otherwise usually applicable. Corporate taxes are due according to federal extended Deadlines. Idaho extended 2019 tax deadlines to all filers affected by the Oregon wildfires and straight-line winds. Tax deadlines falling between 7 September 2020 and 14 January 2021 are pushed to 15 January 2021. Idaho taxpayers not affected by the wildfires and straight-line winds must file and pay taxes following the federal extended deadlines, however, Idaho only follows the federal extension to file, not to pay. Interest will continue to accrue for state tax purposes on any tax that's paid after 15 June 2020, the original Idaho income tax due date. Kentucky extended 2019 tax deadlines for individual and corporate income taxes, and withholding taxes, for taxpayers in designated areas affected by the Oregon wildfires. The extension pushes the deadline to file and pay to 15 January 2021 for eligible taxpayers, and is applicable for quarterly estimated taxes for calendar year corporate returns with automatic extensions. Late filing and payment penalties will be waived but interest will still be charged. Texas announced tax filing extension for taxpayers living in declared disaster areas. Eligible taxpayers can request a temporary extension to file their taxes on a case-by-case basis.

The United States continue to make accommodations to their income tax regimes to provide taxpayers with COVID-19 relief for the 2019 tax year. Here is a quick roundup of recent developments: Arkansas updated its COVID-19 related FAQs. The FAQs confirm that business grants and economic impact payments are not subject to state income tax, 2019 individual income tax filing extensions to 15 July 2020 and more. New Jersey extended 2019 Corporate Business Tax (CBT) penalty relief for calendar year filers to 16 November 2020. Fiscal year filers similarly obtain a waiver of penalties by 30 days past their federal extension, e.g. fiscal filers with an extended federal due date of 16 November 2020 will have until 15 December 2020 to file their 2019 CBT returns with the state. North Carolina passed Session Law 2020-97 (signed by the Governor on 4 September 2020) allocating federal funds in the Coronavirus Relief Act to support families with qualifying children with virtual schooling and childcare costs during the COVID-19 pandemic. The grant is a total of USD 335 for each eligible individual, regardless of the number of qualifying children. Oregon and Louisiana announced special mailing (see OR Press Release & LA Press Release) from the Internal Revenue Service (IRS) encouraging residents (mostly non-filers) to register for their federal Economic Impact Payment. Non-filers are typically not required to file federal income tax returns but may qualify for an Economic Impact Payment. The deadline for registering for an Economic Impact Payment for both taxpayers and non-filers is 15 October 2020.