03 Oct 2023
How Much Do I Owe? State Interest Rates on State Tax Underpayments/Refunds of Overpayments
Complying with the return filing and payment deadlines imposed by different states is one of the most challenging tasks faced by taxpayers and their accountants/counsel. The sheer volume of returns and potentially large number of payments to be made, coupled with the states’ differing rules on the availability of automatic extensions and other events that may change tax return due date, add to the complexities and potential for interest assessment and, often too, penalties. Reference our new state law survey for a quick read on the interest rate(s) that apply to state tax deficiencies. Good news—taxpayers are eligible for interest on overpayments, often based on the date of the refund claim.
Related Content
- Corporate Income Tax: Late Payment Penalty State Law Survey
Reference this survey which provides a summary of laws in all 50 states plus the District of Columbia governing penalties imposed for the late payment of corporate income taxes. If a taxpayer fails to comply with the corporate income tax return filing and payment requirements, states have a complex and intricate network of penalties that can apply. A common penalty is for failing to timely pay the income tax due. Penalty rates vary by state and often change. - Estimated Payment Thresholds and Due Dates State Law Survey
Use this survey to know the applicable state tax due dates. The survey provides a summary of laws in all 50 states plus the District of Columbia governing estimated tax payment thresholds and due dates for corporations. States have differing rules for when estimated tax payments are triggered, the due dates for such payments, when required, how the underlying liability is calculated, when electronic payment is required, potential penalties for noncompliance, and interest charges on missed payments or insufficient payments.
Practical Guidance Updates
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- Tax Key Legal Developments Tracker (Federal)—keep up to date with key legal developments!
- Business Entities. IRS prescribes short-term, mid-term, and long-term applicable federal rates for the month of September, for purposes of I.R.C. § 1274(d). Rev. Rul. 2023-16.
- Employment. IRS published an annual notice providing the 2023-2024 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home, specifically (1) the special transportation industry meal and incidental expenses rates, (2) the rate for the incidental expenses only deduction, and (3) the rates and list of high-cost localities for purposes of the high-low substantiation method. R.S. Notice 2023-68.
- Practice, Procedure and Controversy. IRS announces sweeping effort to restore fairness to tax system with Inflation Reduction Act funding. New compliance efforts will be focused on increasing scrutiny on high-income earners, partnerships, corporations, and promoters abusing tax rules on the books. IR-2023-166 (Sept. 8, 2023).
- Exempt Organizations. IRS revokes its determination that certain organizations qualify as tax-exempt organizations described in R.C. §§ 501(c)(3)and 170(c)(2). Ann. 2023-25, I.R.B. 2023-37.
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