What Virginia tax interest rates applied during the third quarter of 2015?

Subject

Third Quarter Interest Rates

Plain-English summary

Virginia announced 5% annual interest on tax underpayments and assessments and 5% on tax overpayments and refunds for the third quarter of 2015. The corresponding federal rates were 3%, and Virginia added two percentage points under Va. Code § 58.1-15.

The reduced rate for qualifying assessments in administrative appeal, beginning nine months after assessment until determination, was 0%. The bulletin also applied the 5% rate through October 15, 2015 for specified estimated-tax additions of taxpayers whose taxable year ended June 30, 2015, and described separate local delinquency and refund rules.

Common questions

Were these current rates? No. They applied only to the third quarter of 2015.

Did the 0% rate apply to every assessment? No. It applied only to qualifying disputed assessments during the stated administrative-appeal period.

Citations and references

• IRC § 6621.
• Va. Code §§ 58.1-15 and 58.1-3916.
• Virginia Tax Bulletin 15-4.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 15-111

Original ruling text

TAX BULLETIN 15-4
Virginia Department of Taxation

June 9, 2015

VIRGINIA’S INTEREST RATES WILL REMAIN THE SAME FOR THE THIRD QUARTER OF 2015

Federal Rates Remain Unchanged: State and certain local interest rates are subject to change every quarter due to changes in federal rates established pursuant to IRC § 6621. IRC § 6621 dictates that the federal underpayment and overpayment rates are three percentage points higher than the federal short-term rate. Federal rates for the third quarter of 2015 will be 3% for tax underpayments (assessments) and 3% for tax overpayments (refunds) by taxpayers other than corporations.

Virginia Code § 58.1-15 provides that the underpayment rate for Virginia taxes will be 2% higher than the corresponding federal rate and the overpayment rate for Virginia taxes will be 2% higher than the corresponding federal rate. Accordingly, the Virginia rates for the third quarter of 2015 will be 5% for tax underpayments (assessments) and 5% for tax overpayments (refunds).

Rate for Addition to Tax for Underpayments of Estimated Tax

Taxpayers whose taxable year ends on June 30, 2015 : 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 third quarter 5% underpayment rate will apply through the due date of the return, October 15, 2015.

Reduced Rate for Certain Assessments in Dispute:

For administrative appeals filed with the Department of Taxation on or after July 1, 2011, a reduced interest rate equal to the federal short term rate established pursuant to IRC § 6621(b) applies, beginning nine months after the date of assessment until a determination is issued . The federal short-term rate established pursuant to IRC § 6621(b) for the third quarter of 2015, rounded to the nearest whole percent, is 0%. Accordingly, the reduced rate for the third quarter of 2015 for qualifying assessments in dispute is 0%.

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 third quarter of 2015, the federal underpayment rate is 3%.

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 (Refund)

Underpayment (Assessment)

Reduced

Rate

Beginning

Through

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-Sept-03

7%

7%

-

1-Oct-03

31-Mar-04

6%

6%

-

1-Apr-04

30-Jun-04

7%

7%

-

1-Jul-04

30-Sept-04

6%

6%

-

1-Oct-04

31-Mar-05

7%

7%

-

1-Apr-05

30-Sept-05

8%

8%

-

1-Oct-05

30-Jun-06

9%

9%

-

1-July-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-Sept-08

7%

7%

-

1-Oct-08

31-Dec-08

8%

8%

-

1-Jan-09

31-Mar-09

7%

7%

-

1-Apr-09

31-Dec-10

6%

6%

-

1-Jan-11

31-Mar-11

5%

5%

-

1-Apr-11

30-Sept-11

6%

6%

-

1-Oct-11

30-Sept-15

5%

5%

0%

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 Laws, Rules and Decisions section of the Department of Taxation’s website, located at www.tax.virginia.gov.

Factors for Computing Daily Interest

5%

(Simple interest pursuant to Va. Code § 58.1-15)

365 day year

1
0.00014
53
0.00726
105
0.01438
157
0.02151
210
0.02877
262
0.03589
314
0.04301

2
0.00027
54
0.00740
106
0.01452
158
0.02164
211
0.02890
263
0.03603
315
0.04315

3
0.00041
55
0.00753
107
0.01466
159
0.02178
212
0.02904
264
0.03616
316
0.04329

4
0.00055
56
0.00767
108
0.01479
160
0.02192
213
0.02918
265
0.03630
317
0.04342

5
0.00068
57
0.00781
109
0.01493
161
0.02205
214
0.02932
266
0.03644
318
0.04356

6
0.00082
58
0.00795

162
0.02219
215
0.02945
267
0.03658
319
0.04370

7
0.00096
59
0.00808
110
0.01507
163
0.02233
216
0.02959
268
0.03671

8
0.00110

111
0.01521
164
0.02247
217
0.02973
269
0.03685
320
0.04384

9
0.00123
60
0.00822
112
0.01534
165
0.02260
218
0.02986

321
0.04397

61
0.00836
113
0.01548
166
0.02274
219
0.03000
270
0.03699
322
0.04411

10
0.00137
62
0.00849
114
0.01562
167
0.02288

271
0.03712
323
0.04425

11
0.00151
63
0.00863
115
0.01575
168
0.02301
220
0.03014
272
0.03726
324
0.04438

12
0.00164
64
0.00877
116
0.01589
169
0.02315
221
0.03027
273
0.03740
325
0.04452

13
0.00178
65
0.00890
117
0.01603

222
0.03041
274
0.03753
326
0.04466

14
0.00192
66
0.00904
118
0.01616
170
0.02329
223
0.03055
275
0.03767
327
0.04479

15
0.00205
67
0.00918
119
0.01630
171
0.02342
224
0.03068
276
0.03781
328
0.04493

16
0.00219
68
0.00932

172
0.02356
225
0.03082
277
0.03795
329
0.04507

17
0.00233
69
0.00945
120
0.01644
173
0.02370
226
0.03096
278
0.03808

18
0.00247

121
0.01658
174
0.02384
227
0.03110
279
0.03822
330
0.04521

19
0.00260
70
0.00959
122
0.01671
175
0.02397
228
0.03123

331
0.04534

71
0.00973
123
0.01685
176
0.02411
229
0.03137
280
0.03836
332
0.04548

20
0.00274
72
0.00986
124
0.01699
177
0.02425

281
0.03849
333
0.04562

21
0.00288
73
0.01000
125
0.01712
178
0.02438
230
0.03151
282
0.03863
334
0.04575

22
0.00301
74
0.01014
126
0.01726
179
0.02452
231
0.03164
283
0.03877
335
0.04589

23
0.00315
75
0.01027
127
0.01740

232
0.03178
284
0.03890
336
0.04603

24
0.00329
76
0.01041
128
0.01753
180
0.02466
233
0.03192
285
0.03904
337
0.04616

25
0.00342
77
0.01055
129
0.01767
181
0.02479
234
0.03205
286
0.03918
338
0.04630

26
0.00356
78
0.01068

182
0.02493
235
0.03219
287
0.03932
339
0.04644

27
0.00370
79
0.01082
130
0.01781
183
0.02507
236
0.03233
288
0.03945

28
0.00384

131
0.01795
184
0.02521
237
0.03247
289
0.03959
340
0.04658

29
0.00397
80
0.01096
132
0.01808
185
0.02534
238
0.03260

0.00000
341
0.04671

81
0.01110
133
0.01822
186
0.02548
239
0.03274
290

342
0.04685

30
0.00411
82
0.01123
134
0.01836
187
0.02562

291
0.03986
343
0.04699

31
0.00425
83
0.01137
135
0.01849
188
0.02575
240
0.03288
292
0.04000
344
0.04712

32
0.00438
84
0.01151
136
0.01863
189
0.02589
241
0.03301
293
0.04014
345
0.04726

33
0.00452
85
0.01164
137
0.01877

242
0.03315
294
0.04027
346
0.04740

34
0.00466
86
0.01178
138
0.01890
190
0.02603
243
0.03329
295
0.04041
347
0.04753

35
0.00479
87
0.01192
139
0.01904
191
0.02616
244
0.03342
296
0.04055
348
0.04767

36
0.00493
88
0.01205

192
0.02630
245
0.03356
297
0.04068
349
0.04781

37
0.00507
89
0.01219
140
0.01918
193
0.02644
246
0.03370
298
0.04082

38
0.00521

141
0.01932
194
0.02658
247
0.03384
299
0.04096
350
0.04795

39
0.00534
90
0.01233
142
0.01945
195
0.02671
248
0.03397

351
0.04808

0.00000
91
0.01247
143
0.01959
196
0.02685
249
0.03411
300
0.04110
352
0.04822

40
0.00548
92
0.01260
144
0.01973
197
0.02699

301
0.04123
353
0.04836

41
0.00562
93
0.01274
145
0.01986
198
0.02712
250
0.03425
302
0.04137
354
0.04849

42
0.00575
94
0.01288
146
0.02000
199
0.02726
251
0.03438
303
0.04151
355
0.04863

43
0.00589
95
0.01301
147
0.02014

252
0.03452
304
0.04164
356
0.04877

44
0.00603
96
0.01315
148
0.02027
200
0.02740
253
0.03466
305
0.04178
357
0.04890

45
0.00616
97
0.01329
149
0.02041
201
0.02753
254
0.03479
306
0.04192
358
0.04904

46
0.00630
98
0.01342

202
0.02767
255
0.03493
307
0.04205
359
0.04918

47
0.00644
99
0.01356
150
0.02055
203
0.02781
256
0.03507
308
0.04219

48
0.00658

151
0.02068
204
0.02795
257
0.03521
309
0.04233
360
0.04932

49
0.00671
100
0.01370
152
0.02082
205
0.02808
258
0.03534

361
0.04945

101
0.01384
153
0.02096
206
0.02822
259
0.03548
310
0.04247
362
0.04959

50
0.00685
102
0.01397
154
0.02110
207
0.02836

311
0.04260
363
0.04973

51
0.00699
103
0.01411
155
0.02123
208
0.02849
260
0.03562
312
0.04274
364
0.04986

52
0.00712
104
0.01425
156
0.02137
209
0.02863
261
0.03575
313
0.04288
365
0.05000