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The Uniform Penalty and Interest Act (UPIA), effective January 1, 1994, created a uniform interest rate charged and paid by the department on underpayments and overpayments. The uniform rate applies to most taxes administered by the department. The Racing Privilege Tax Act, the Revenue Act of 1939, the Real Estate Transfer Act, and the Coin Operated Amusement Device Tax are exempt from UPIA.
Interest is assessed at the same rate for each tax. The rate is reviewed twice each year - on January 1 and July 1 - and adjusted according to the "underpayment rate" or the "Short-term federal rate" established under the Internal Revenue Code (IRC), Section 6621. For interest accruing on or after January 1, 2004, the rate of interest payable on overpayments and underpayments is the "short-term federal rate" for the first year that the overpayment or underpayment accrues interest. This rate is established by the IRS under the IRC Section 6621, and is 3 percent less than the "underpayment rate." After one year, interest will accrue on any remaining balance at the "underpayment rate," as established under IRC Section 6621.
For interest accruing on or after January 1, 1994, and before January 1, 2004, the rate is the "federal underpayment rate."
| DATE | Short Term
| Underpayment
Rate |
| 01/01/2008 - 06/30/2008 | 4% | 7% |
| 01/01/2007 - 12/31/2007 | 5% | 8% |
| 07/01/2006 - 12/31/2006 | 5% | 8% |
| 01/01/2006 - 06/30/2006 | 4% | 7% |
| 07/01/2005 - 12/31/2005 | 3% | 6% |
| 01/01/2005 - 06/30/2005 | 2% | 5% |
| 07/01/2004 - 12/31/2004 | 1% | 4% |
| 01/01/2004 - 06/30/2004 | 1% | 4% |
| 07/01/2003 - 12/31/2003 | 5% | |
| 01/01/2003 - 06/30/2003 | 5% | |
| 01/01/2002 - 12/31/2002 | 6% | |
| 07/01/2001 - 12/31/2001 | 7% | |
| 07/01/2000 - 06/30/2001 | 9% | |
| 07/01/1999 - 06/30/2000 | 8% | |
| 01/01/1999 - 06/30/1999 | 7% | |
| 07/01/1998 - 12/31/1998 | 8% | |
| 01/01/1995 - 06/30/1998 | 9% | |
| 07/01/1994 - 12/31/1994 | 8% | |
| 01/01/1994 - 06/30/1994 | 7% |