Saipan--Victims of Super Typhoon Yutu in the Commonwealth of the Northern Mariana Islands may qualify for tax relief from the CNMI Department of Finance Division of Revenue and Taxation.
With Governor Ralph DLG. Torres having declared that a major disaster exists in the CNMI, along with President Donald J. Trump and following the recent disaster declaration for individual assistance issued by the Federal Emergency Management Agency (FEMA) and the Department of Defense, as well as local agencies, the DRT is announcing today that affected taxpayers on Saipan, Tinian, and Rota may be eligible to receive tax relief.
Secretary of Finance Larrisa Larson emphasized that this tax relief is extended to residents to temporarily relieve financial burdens further compounded by island-wide recovery efforts.
“Along with Governor Torres, we hope that this offers some relief to our community as we recovery together. It is critical that taxpayers understand these guidelines and contact our office for more information or clarification if needed,” Larson said.
This declaration permits the DRT to postpone certain CNMI deadlines for taxpayers who reside or have a business in the disaster area.
Accordingly, taxpayers with deadlines for CNMI filings falling on or after Oct. 24, 2018, and before Nov. 29, 2018, are granted additional time to file through Nov. 30, 2018. This includes the quarterly CNMI estimated income tax payments, the quarterly withholding tax returns, and the local monthly business gross tax returns normally due on Oct. 31, 2018.
It also includes the gaming machine jackpot tax monthly withholding returns due on Nov. 10, 2018, and the bar and occupancy tax returns due on Nov. 20, 2018.
Tax relief not included are taxpayers who had a valid CNMI extension to file their 2017 return due to run out on Oct. 15, 2018, and CNMI tax-exempt organizations that operate on a calendar-year basis and had an automatic CNMI extension due to run out on Oct. 15, 2018.
Also not included are gaming machine jackpot tax monthly withholding returns due on Oct. 10, 2018 as well as bar and hotel occupancy tax returns due on Oct. 20, 2018.
In addition, CNMI penalties on employer’s quarterly withholding tax deposits, withholding on real estate transactions, and withholding on earnings at the source, including gambling winnings of foreign persons, due on or after Oct. 24, 2018, and before Nov. 23, 2018, will be abated as long as the deposits are made by Nov. 23, 2018.
If an affected taxpayer receives a late filing or late payment penalty notice from the DRT for a return that has an original or extended filing deadline or payment or deposit due date that falls within the postponement period, the taxpayer should call the telephone number below to have the DRT abate the penalty.
Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns and pay taxes are those taxpayers who live in the Commonwealth and/or have businesses (including tax-exempt organizations) whose principal place of business is located in the covered disaster area.
Other Grants of Relief
The DRT gives affected taxpayers until Nov. 30, 2018 to file most other tax returns (including individual, corporate, and estate income tax returns as well as partnership returns, S corporation returns, and trust returns) that have either an original or extended due date falling on or after Oct. 24, 2018, and before Nov. 29, 2018.
Affected taxpayers that have an estimated income tax payment originally due on or after Oct. 24, 2018, and before Nov. 29, 2018, will not be subject to penalties for failure to pay estimated tax installments as long as such payments are paid on or before Nov. 30, 2018.
Unless an act is specifically listed in Rev. Proc. 2007-56, the postponement of time to file and pay does not apply to information returns in the W-2, 1094, 1095, 1097, 1098, or 1099 series, to Forms 1042-S, 3921, 3922 or 8027, or to employment and excise tax deposits. However, penalties on deposits due to the CNMI Treasury on or after Oct. 24, 2018, and before Nov. 23, 2018, will be abated as long as the tax deposits were made by Nov. 23, 2018.
Affected taxpayers in the declared disaster area has the option of claiming disaster-related casualty losses on their Northern Mariana Territorial Income Tax return for either the year in which the event occurred or the prior year.
Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684, Casualties and Thefts and its Instructions.
Affected taxpayers claiming the disaster loss on a 2017 return should put the Disaster Designation “Northern Mariana Islands, Typhoon Yutu” at the top of the form so that the DRT can expedite the processing of the refund.
The DRT will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation “Northern Mariana Islands, Typhoon Yutu “ in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the DRT.
Taxpayers concerned about how Typhoon Yutu may impact tax filing and payment obligations to the Commonwealth government may contact the CNMI Department of Finance Division of Revenue and Taxation at (670) 664-1000 or a local office on
Saipan, Tinian, or Rota. Taxpayers who are contacted by the DRT on a collection or examination matter should explain how the disaster impacts them so that the DRT can provide appropriate consideration to their case. Taxpayers may download forms from the official CNMI Department of Finance, Division of Revenue and Taxation website, www.cnmidof.net. The DRT’s telephone number for general tax questions is (670) 664-1000.