What is South Carolina's tax interest rate for the period July 1, 2006 through December 31, 2007 (per SC IL #07-17)?

Plain-English summary

South Carolina's interest rate on both tax underpayments and overpayments is 8% for the period July 1, 2006 through December 31, 2007. The rate is set under S.C. Code § 12-54-25 and changes periodically as the underlying federal rate moves.

Two mechanical points matter. First, the interest is compounded daily, except that simple interest applies to underpayments of declaration of estimated tax. Second, for fiscal year 2007-2008, budget provisos direct the Department to reduce the interest it pays on eligible refunds by a total of two percentage points from the listed rate. Because the listed rate is 8%, the reduction brings the interest paid on eligible refunds to 6% for refunds paid from July 1, 2007 through June 30, 2008.

The letter also reproduces the Department's full historical interest-rate table going back to 1985, which is useful when computing interest across older periods.

What this means for you

If you owe South Carolina tax

Interest accrues at 8% for the July 1, 2006 through December 31, 2007 period, compounded daily (simple interest for underpaid estimated tax). Interest is separate from any penalties.

If South Carolina owes you a refund

For fiscal year 2007-2008, the interest the state pays on eligible refunds is reduced by two percentage points to 6% for refunds paid from July 1, 2007 through June 30, 2008. This reduction is a temporary measure tied to that fiscal year.

Common questions

Q: What is the South Carolina interest rate for this period?
A: 8% on both underpayments and overpayments for July 1, 2006 through December 31, 2007, compounded daily.

Q: Does the 8% rate apply to the interest the state pays me on a refund?
A: No. For fiscal year 2007-2008 the refund-interest rate is reduced by two percentage points to 6%.

Q: How is the interest computed?
A: It is compounded daily, except that simple interest applies to underpayments of declaration of estimated tax.

Subject

Interest Rate

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/IL07-17.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P. O. Box 125, Columbia, South Carolina 29214
Website Address: http://www.sctax.org

SC INFORMATION LETTER #07-17

SUBJECT:

Interest Rate

DATE:

September 5, 2007

REFERENCE:

S.C. Code Ann. Section 12-54-25 (2000)
Act No. 117, Part IB, Section 56DD, Proviso 56DD.38 (2007)

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (2000)
SC Revenue Procedure #05-2

SCOPE:

An Information Letter is a written statement issued to the public to announce
general information useful in complying with the laws administered by the
Department. An Information Letter has no precedential value.

The interest rate to be applied to underpayments and overpayments is listed below.* The rate is
compounded daily except simple interest applies to the underpayment of declaration of estimated
tax.
Period

Rate*

Period

Rate*

9/1/85 – 12/31/85
1/1/86 – 6/30/86
7/1/86 – 9/30/87
10/1/87 – 12/31/87
1/1/88 – 3/31/88
4/1/88 – 9/30/88
10/1/88 – 3/31/89
4/1/89 – 9/30/89
10/1/89 – 3/31/91
4/1/91 – 12/31/91
1/1/92 – 3/31/92
4/1/92 – 9/30/92
10/1/92 – 6/30/94
7/1/94 – 9/30/94
10/1/94 – 3/31/95
4/1/95 – 6/30/95
7/1/95 – 3/31/96
4/1/96 – 6/30/96
7/1/96 – 3/31/98
4/1/98 – 12/31/98
1/1/99 – 3/31/99

11%
10%
9%
10%
11%
10%
11%
12%
11%
10%
9%
8%
7%
8%
9%
10%
9%
8%
9%
8%
7%

4/1/99 – 3/31/00
4/1/00 – 3/31/01
4/1/01 – 6/30/01
7/1/01 – 12/31/01
1/1/02 – 12/31/02
1/1/03 – 9/30/03
10/1/03 – 3/31/04
4/1/04 – 6/30/04
7/1/04 – 9/30/04
10/1/04 – 3/31/05
4/1/05 – 9/30/05
10/1/05 – 6/30/06
7/1/06 – 12/31/07

8%
9%
8%
7%
6%
5%
4%
5%
4%
5%
6%
7%
8%

• Note reduction of interest rate on refunds. 2007 Act No. 117, Part IB, Section 56DD,
  Proviso 56DD.38 directs the Department to reduce the rate of interest paid on eligible
  refunds by two percentage points from the above listed rates for refunds paid from July 1,
  2007 through June 30, 2008.