Key Australian State tax developments and other measures in response to COVID-19

Payroll tax relief:¹ businesses with total grouped Australian wages of $10 million or less for the 2019/20 financial year will have their annual tax liability reduced by 25% when they lodge their annual reconciliation (due on 28 July 2020). For eligible businesses who lodge and pay monthly, no payment for the months of March, April or May 2020 will be required. Businesses eligible for payroll tax relief will still need to provide wage details paid in these months. 

Increased payroll tax threshold: the payroll tax threshold for the financial year commencing 1 July 2020 will increase from $900,000 to $1 million. Eligible businesses will not be subject to payroll tax in 2020/21.

Other measures include:²

• Waiver of various State fees and charges;
• $250m to employ additional cleaners of public infrastructure;
• Over $250m to bring forward maintenance of public assets;
• $500m to bring forward capital works and maintenance.

Further details on these measures are still pending.

Payroll tax refunds and waivers:⁴ employers (or part of a group of employers) who pay $6.5 million or less in Australian taxable wages may receive a refund of payroll tax for 2 months and a payroll tax waiver for 3 months. Employers (or part of a group of employers) who pay more than $6.5 million in Australian taxable wages and have been negatively affected (directly or indirectly) by coronavirus may apply for a deferral of payroll tax for the 2020 calendar year and a refund of payroll tax for 2 months.

A business is directly or indirectly affected by coronavirus if their current turnover, profit, customers, bookings, retail sales, supply contracts or other factors are negatively affected compared with normal operating conditions.

Deferred payments will be due 14 January 2021.

Businesses eligible for payroll tax relief in Queensland will still need to lodge their payroll tax returns as normal (without paying them) and can complete the payroll tax deferral application form online. 

The Queensland Office of State Revenue will also work with affected businesses to create repayment plans for the deferred tax liabilities.

$500 million concessional loan facility:⁵ the loan facility will provide low interest loans of up to $250,000 for carry on finance with an initial 12-month interest-free period to assist businesses impacted by COVID-19 to retain employees and maintain operations.

The Queensland Rural and Industry Development Authority (QRIDA) is responsible for the administration of these concessional loans and is currently taking expressions of interest in the lead up to rolling these loans out as soon as possible. 

Market Diversification and Resilience Grants (MDRG) program:⁶ the MDRG program will benefit Queensland agriculture, food and fishing exporters and their critical supply chain partners, as well as industry organisations working with exporters to build resilience by diversifying into new markets (international or interstate). The program has 2 components: 

(1) Equipment purchase grants of up to $7,500 (excluding GST) will be available to support new equipment purchases up to a maximum cost of $10,000 (excluding GST). Applicants must contribute 25% of the total cost of the new equipment. The MDRG program will provide the remaining 75% of total costs.

Applications for equipment purchase grants are accessible on an ongoing basis from Thursday 12 March 2020.

(2) Project grants of up to $50,000 (excluding GST) will be available to support project activities (e.g. market evaluation studies, market visits, staff training, new equipment such as refrigeration, or boat modifications necessary to meet market requirements). Applicants must co-invest 50% of the total cost of their project activities or equipment purchases and should provide evidence of their contributions both in-kind (e.g. reasonable salary costs for key personnel, freight costs) and cash. Cash contributions must be at least 25% of total project costs.

Applications for project grants open Thursday 12 March 2020 and close Monday 20 April 2020.

Small and medium business power bill relief:  small and medium businesses who consume less than 100,000 kilowatt hours (kWh) may be eligible for a $500 rebate off energy bills. The relief will be automatically applied on eligible electricity bills.

Business rent relief: businesses who rent state government premises may be eligible for rent relief. More information will be available soon.

Mentoring sessions and financial workshops: workshops are available for small businesses to provide tailored support including financial mentoring and business planning.