Bulletin Number
VTB 05-10
Tax Type
General Provisions
Description
Fourth Quarter Interest Rates 2005
Topic
Interest Rates
Date Issued
09-23-2005
TAX BULLETIN
Virginia Department of Taxation
September 23, 2005
INTEREST RATES
FOURTH QUARTER 2005
Virginia Department of Taxation
September 23, 2005
INTEREST RATES
FOURTH QUARTER 2005
Federal Rates Changed: State and certain local interest rates are subject to change every quarter based on changes in federal rates established pursuant to IRC § 6621. The federal rates for the fourth quarter of 2005 will be 7% for tax underpayments (assessments) and 7% for tax overpayments (refunds) by taxpayers other than corporations. Va. Code § 58.1-15 provides that the underpayment rates for Virginia taxes will be 2% higher than the corresponding federal rates and overpayment rates for Virginia taxes will be 2% higher than the federal rate. Pursuant to the decision of the Circuit Court of Fairfax County in General Motors Corporation v. Commonwealth of Virginia, the Department is no longer applying the large corporate underpayment rate.
Accordingly, the Virginia rates for the fourth quarter of 2005 will be 9% for tax underpayments (assessments), and 9% for tax overpayments (refunds).
Rate for Addition to Tax for Underpayments of Estimated Tax
Taxpayers whose taxable year ends on September 30, 2005: For the purpose of computing the addition to the tax for underpayment of Virginia estimated income taxes on Form 500C (for corporations), Form 760C (for individuals, estates and trusts), or Form 760F (for farmers and fishermen), the fourth quarter 9% underpayment rate will apply through the due date of the return, January 17, 2006, (for corporations, individuals and fiduciaries).
Local Tax
Assessments: Localities that assess interest on delinquent taxes under 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 fourth quarter of 2005, the federal underpayment rate is 7%.
Refunds: Effective July 1, 1999, localities which charge interest on delinquent taxes are required to pay interest to taxpayers on all overpayments or erroneously assessed taxes at the same rate as they charge interest on delinquent taxes under Va. Code § 58.1-3916.
Recent Interest Rates
Accrual | Period | Non –Corporation Overpayment | Corporation Overpayment | Underpayment |
Beginning | Through | (Refund) | (Refund) | (Assessment) |
1-Apr-98 | 31-Dec-98 | 7% | 7% | 10% |
1-Jan-99 | 31-Mar-99 | 7% | 6% | 9% |
1-Apr-99 | 31-Dec-99 | 8% | 7% | 10% |
1-Jan-00 | 31-Mar-00 | 10% | 10% | 10% |
1-Apr-00 | 31-Mar-01 | 11% | 11% | 11% |
1-Apr-01 | 30-Jun-01 | 10% | 10% | 10% |
1-Jul-01 | 31-Dec-01 | 9% | 9% | 9% |
1-Jan-02 | 31-Dec-02 | 8% | 8% | 8% |
1-Jan-03 | 30-Sep-03 | 7% | 7% | 7% |
1-Oct-03 | 31-Mar-04 | 6% | 6% | 6% |
1-Apr-04 | 30-Jun-04 | 7% | 7% | 7% |
1-Jul-04 | 30-Sep-04 | 6% | 6% | 6% |
1-Oct-04 | 31-Mar-05 | 7% | 7% | 7% |
1-Apr-05 | 30-Sep-05 | 8% | 8% | 8% |
1-Oct-05 | 31-Dec-05 | 9% | 9% | 9% |
Additional Information: Contact Customer Services, Virginia Department of Taxation, P. O. Box 1115, Richmond, Virginia 23218-1115, or call the following numbers for additional information about interest rates and penalties.
| Individual & Fiduciary Income Tax | (804) 367-8031 |
| Corporation Income Tax | (804) 367-8037 |
| Withholding Tax | (804) 367-8037 |
| Soft Drink Excise Tax | (804) 786-2450 |
| Aircraft Sales & Use Tax | (804) 786-2450 |
| Other Sales & Use Taxes | (804) 367-8037 |
In addition, this Tax Bulletin along with other reference documents are available online in the Tax Policy Library section of the Department of Taxation’s web site, located at www.tax.virginia.gov.
Tax Bulletins