AB 1089

This bill modifies the interest rates applicable to various late, nondelinquent

taxes and fees owed to the Department of Revenue and to overpayments for those

taxes and fees that are refunded by DOR. Under current law, generally, late,

nondelinquent taxes or fees administered by DOR are subject to an interest rate of

12 percent per year, and DOR must pay interest at the rate of 3 percent per year on

refunds of overpayments of those taxes or fees. Under the bill, the interest rate for

late, nondelinquent taxes or fees administered by DOR is 6 percent per year, and

DOR must pay interest at the rate of 6 percent per year on refunds of overpayments.

The bill applies to the following taxes and fees: 1) the individual income and

corporate income and franchise tax; 2) the withholding; 3) the sales and use tax; 4)

taxes paid by utilities and insurers; 5) excises taxes on motor vehicle fuel, alcohol

beverages, and cigarettes, tobacco, and vapor products; 6) the economic development

surcharge; 7) the petroleum inspection fee; 8) the metalliferous mining tax; and 9)

the charge imposed by DOR on a city, village, town, or county for the expenses

incurred by DOR in examining city, village, town, or county records regarding the

assessment of property upon failure to return information requested by DOR.

Also, current law requires that an interest rate of 12 percent per year apply to

delinquent individual income and corporate income and franchise taxes in instances

in which the secretary of DOR determines that reduction from an interest rate of 1.5

percent per month for such delinquent taxes is fair and equitable. The bill requires

that an interest rate of 6 percent per year apply to such delinquent taxes in instances

in which the DOR secretary determines that the reduction is fair and equitable.