Interest Assessment Guide

Interest Rate Table Used to Determine Interest Due

Starting Month Assessed Interest Ending Month Assessed Interest Monthly Interest Rate
May 1982 July 2012 1.00%
August 2012 Current Month 0.75%

How The Interest Rate Is Determined Annually

The annualized interest rate charged is equal to 9 percent (0.75% monthly) or 2 percent more than the prime rate as published in the Wall Street Journal as of September 30 of the preceding year, which ever is greater. The new rate becomes effective on January 1st and applies to interest assessed for months assessed going forward. Previous interest rates in force still apply to months assessed interest prior to the new rate.

How Interest Due is Calculated

When a bill is paid after the due date, interest is assessed starting with the month after the due date of the bill through the month the payment is received. An additional month of interest is assessed on the first day of each month the bill remains unpaid.

Interest Calculation Examples

Example 1

Customer files their 2nd quarter 2012 tax report on September 15, 2012. The report due date for 2nd quarter 2012 is 07/31/2012. The customer owes $2,000.00 of tax. Since the report was filed after the tax due date, interest would be assessed on the $2,000.00. This example assumes the customer makes the payment in September, 2012.

  Interest Period Covered
Tax Due Date - 07/31/2012
Starting Month Assessed Interest – August 2012
* Ending Month Assessed Interest – September 2012
** Total Number of Months Assessed Interest at 0.75% – 2

  Interest Calculation
(for period from August, 2012 through September, 2012)

  Tax Due x Applicable Interest Rate = Monthly Interest
Monthly Interest x # of Months Assessed Interest = Interest Due


$2,000.00 x 0.75% = $15.00
$15.00 x 2 = $30.00

Example 2

Customer files their 3rd quarter 2011 tax report on September 15, 2012. The report due date for 3rd quarter 2011 is 10/31/2011. The customer owes $1,000.00 of tax. Since the report was filed after the tax due date, interest would be assessed on the $1,000.00. This example assumes the customer makes the payment in September, 2012. Because there were multiple interest rates in effect from the due date of the report until the time the report was filed, interest needs to be calculated using different interest rates from the table above as follows:

  Interest Period Covered
Tax Due Date - 10/31/2011
Starting Month Assessed Interest – November 2011
* Ending Month Assessed Interest – September 2012
Total Number of Months Assessed Interest – 11
** Total Number of Months Assessed Interest at 1% - 9
** Total Number of Months assessed interest at 0.75% - 2

  Interest Calculation
(for period from November, 2011 through July, 2012)

  Tax Due x Applicable Interest Rate = Monthly Interest
Monthly Interest x # of Months Assessed Interest = Interest Due


$1,000.00 x 1.00% = $10.00
$10.00 x 9 = $90.00

  (for period from August, 2012 through – September, 2012)

  Tax Due x Applicable Interest Rate = Monthly Interest
Monthly Interest x # of Months Assessed Interest = Interest Due


$1,000.00 x 0.75% = $7.50
$7.50 x 2 = $15.00

  Total Interest Due = $105.00 (90.00 +$15.00)

* Ending month in this example is the month the payment is received. If the payment is received after September, 2012 as the example assumes, additional months of interest will be assessed until the payment is received.

** The Interest Rate applied using the table above based on the months assessed interest.