What Virginia tax interest rates applied during the fourth quarter of 2008?

Subject

Fourth-quarter 2008 Virginia tax interest rates

Plain-English summary

Virginia's ordinary state interest rates were 8% for both assessments and refunds during the fourth quarter of 2008. Federal rates were 6%, and Virginia added two percentage points.

The bulletin applied 8% to estimated-tax underpayment additions for taxpayers with years ending September 30, 2008. Its printed due date is January 15, 2008, which predates that year-end; the source text is preserved below rather than silently corrected.

Local delinquency and refund interest remained subject to Va. Code § 58.1-3916.

What this means for you

• Use 8% for the historical fourth-quarter 2008 state assessment and refund rate.
• Verify the applicable return due date independently because the source contains a chronological inconsistency.
• Confirm current rates for any other period.

Citations and references

• IRC § 6621.
• Va. Code §§ 58.1-15 and 58.1-3916.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 08-175

Original ruling text

TAX BULLETIN 08-10

Virginia Department of Taxation

September 18, 2008

VIRGINIA’S FOURTH QUARTER 2008 INTEREST

RATES WILL CHANGE

Federal Rates To Change: State and certain local interest rates are subject to change every quarter due to changes in federal rates established pursuant to IRC § 6621. Federal rates for the fourth quarter of 2008 will be 6% for tax underpayments (assessments) and 6% for tax overpayments (refunds) by taxpayers other than corporations. Va. Code § 58.1-15 provides that 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.

Accordingly, the Virginia rates for the fourth quarter of 2008 will be 8% for tax underpayments (assessments) and 8% for tax overpayments (refunds).

Rate for Addition to Tax for Underpayments of Estimated Tax

Taxpayers whose taxable year ends on September 30, 2008 : 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 8% underpayment rate will apply through the due date of the return, January 15, 2008.

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 2008, the federal underpayment rate is 6%.

Refunds: Localities that 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
Overpayment
Underpayment

Beginning
Through
(Refund)
(Assessment)

1-Apr-00
31-Mar-01
11%
11%

1-Apr-01
30-Jun-01
10%
10%

1-Jul-01
31-Dec-01
9%
9%

1-Jan-02
31-Dec-02
8%
8%

1-Jan-03
30-Sep-03
7%
7%

1-Oct-03
31-Mar-04
6%
6%

1-Apr-04
30-Jun-04
7%
7%

1-Jul-04
30-Sep-04
6%
6%

1-Oct-04
31-Mar-05
7%
7%

1-Apr-05
30-Sep-05
8%
8%

1-Oct-05
30-Jun-06
9%
9%

1-Jul-06
31-Dec-07
10%
10%

1-Jan-08
31-Mar-08
9%
9%

1-Apr-08
30-Jun-08
8%
8%

1-Jul-08
30-Sep-08
7%
7%

1-Oct-08
31-Jan-09
8%
8%

Additional Information: Contact Customer Services, Virginia Department of Taxation, P. O. Box 1115, Richmond, Virginia 23218-1115, or call the following numbers for more 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

This Tax Bulletin, along with other reference documents, is available online in the Tax Policy Library section of the Department of Taxation’s website, located at www.tax.virginia.gov.