Tax Type
General Provisions
Description
Interest Rates; Third Quarter 1991
Topic
Rate of Tax
Date Issued
06-12-1990
Interest Rates; Third Quarter 1991
State and certain local interest rates are subject to change every quarter based on changes in the federal rates established pursuant to I.R.C. § 6621. The federal rates for the third quarter remain at 9% for overpayments, 10% for underpayments, and 12% for "large corporate underpayments' as defined in I.R.C. § 6621(c). However, Va. Code § 58.1-15 has been amended effective July 1, 1991, to provide that the underpayment rate for Virginia taxes will be 2% higher than the corresponding federal rates. Accordingly, the Virginia rates for the third quarter of 1991 will be 9% for tax overpayments (refunds), 12% for tax underpayments (assessments), and 14% on assessments of corporation income tax that exceed $100,000 for a single taxable year and that have not been paid within 30 days of the date of assessment.
Rate for Addition to Tax for Underpayments of Estimated Tax
Taxpayers whose taxable year ends on March 31, 1991: For the purpose of computing the addition to the tax for underpayment of Virginia estimated income taxes on Form 760C (for individuals, estates and trusts), Form 760F (for farmers and fishermen) or Form 500C (for corporations), the second quarter 10% underpayment rate will apply through the due date of the return, July 15, 1991.
Taxpayers whose taxable year ends on June 30, 1991: For the purpose of computing the addition to the tax for underpayment of Virginia estimated income taxes on Form 760C (for individuals, estates and trusts), Form 760F (for farmers and fishermen), or Form 500C (for corporations), the third quarter 12% underpayment rate will apply through the due date of the return, October 15, 1991.
Local Tax
Assessments: Localities assessing interest on delinquent taxes pursuant to Va. Code § 58.1-3916 may impose interest at a rate not to exceed 10% for the first year of delinquency, and at a rate not to exceed 10% or the federal underpayment rate in effect for the applicable quarter, whichever is greater, for the second and subsequent years of delinquency. For the third quarter of 1991, the federal underpayment rate is 10%.
Refunds: Localities which have provided for refund of erroneously assessed taxes may provide by ordinance that such refund be repaid with interest at a rate which does not exceed the rate imposed by locality for delinquent taxes.
Recent Interest Rates
Accrual Period Overpayment Underpayment Large Corporate
Beginning Through (Refund) (Assessment) Underpayment
1-Jan-87 30-Sep-87 8% 9% =
1-Oct-87 31-Dec-87 9% 10% =
1-Jan-88 31-Mar-88 10% 11% =
1-Apr-88 30-Sep-88 9% 10% =
1-Oct-88 31-Mar-89 10% 11% =
1-Apr-89 30-Sep-89 11% 12% =
1-Oct-89 31-Mar-91 10% 11% =
1-Apr-91 30-Jun-91 9% 10% =
1-Jul-91 30-Sep-91 9% 12% 14%
Penalties For Late Filing or Late Payment Increased
Effective July 1, 1991, the late filing and late payment penalties will be imposed at the new rate of 6% per month, up to a maximum of 30%. The 1991 General Assembly enacted legislation (HB 1830, chapter 331 & SB 739, chapter 316) to increase the rate of these penalties from 5% to 6% per month, and increase the maximum from 25% to 30% for the major taxes administered by the Department of Taxation.
All penalties accruing or continuing to accrue on and after July 1, 1991, will be computed at the 6% monthly rate for the following taxes: Individual, fiduciary, and corporation income taxes; withholding taxes, retail sales and use tax; aircraft sales and use tax; watercraft sales and use tax; Northern Virginia motor vehicle fuel sales tax; vending machine sales tax; tire tax; and soft drink excise tax.
For Additional Information
Contact the Taxpayer Assistance Section, Office Services Division, Virginia Department of Taxation, P.O. Box 6-L, Richmond, Virginia 23282, or call the following numbers for additional information about interest rates and penalties.
Rulings of the Tax Commissioner