(a)
Daily computation.
Interest is computed daily, beginning on the first day of delinquency through
and including the day of payment. If paid by mail, the United States Postal
Service postmark date is the date of payment. For purposes of computing the
daily interest factor-the annual rate is divided by the number of days in a
year-the Department will use a 365-day year. Interest is not
compounded.
(b)
Extensions. Tax due dates are established without regard to an
extension of time for filing reports or returns. Although an extension may
relieve a taxpayer from late filing or late payment additions or penalties, the
taxpayer is not relieved from the payment of interest upon the amount due from
the original due date until payment.
(c)
Amendments. Amendments
to tax returns or reports, when allowed or required by statutes and regulations
are considered to amend the tax liability as of the original due date of the
tax for the purpose of computing interest due on account of nonpayment or
underpayment of tax. The interest rate will be the rate applicable upon the
original due date, even when the rate has changed between the date and the date
of the amendment.
(d)
Federal report of change. An underpayment of corporate net
income tax which results from a settlement or resettlement of tax based upon a
final change or correction of Federal taxable income by the Commissioner of
Internal Revenue or other agency or court of the United States, under section
407(b) of the TRC (
72 P. S. §
7407(b)) and section 806 of
the FC (
72 P.S. §
806), is
deemed first due and payable, for the purpose of establishing the rate and
computing interest, 30 days after the corporation receives notice of the final
change or correction. The interest is computed until the additional tax is
paid.
(1) If the original due date of the tax
report is on or before December 31, 1981, the tax settled or resettled is
subject to interest at the rate of 6.0% per annum until
paid-unless reported and paid within the 30-day period, in which case no
interest is due.
(2) If the
original due date of the tax report is on or after January 1, 1982, the
additional tax is subject to the rate of interest and the annual adjustments as
described in §
4.4 (relating to rate of interest
applicable to unpaid taxes).
(3)
The Federal report of change 30-day period does not apply to the personal
income tax. Increases in personal income tax liability assessed or reassessed
as a consequence of a Federal redetermination of Federal taxable income will
bear interest from the original due date of the return at the rate then in
effect, subject to annual adjustment, without regard to the date of the Federal
redetermination.
(e)
Unpaid tax resulting from application, assignment or refund of
credit. If an application, assignment or refund of credit requested by
the taxpayer, under Article XXX of the TRC (
72 P. S. §§
10001-
10004), results in an underpayment of
the tax due upon settlement or resettlement, interest will be calculated on the
amount of the credit applied, assigned or refunded from the date the credit was
applied, assigned or refunded to the date of payment.
Example. On April 15, 1985, a corporation
makes the required tentative tax payment in the amount of $100,000 on account
of its 1985 capital stock tax liability. On March 6, 1986, the corporation
files its 1985 annual corporate tax report, reporting its capital stock tax
liability at $50,000 and requesting the transfer of the $50,000 credit to
another account. On March 17, 1986, the report is posted to its account and the
$50,000 credit acknowledged by the Department, with notice to the taxpayer. On
April 20, 1986, the Department prepares the journal entry transferring the
credit as requested by the taxpayer. On August 5, 1986, the Department settles
the corporation's 1985 capital stock tax liability at $80,000, an increase of
$30,000 over the reported tax liability.
On October 2, 1986, the taxpayer pays the tax increased as
a result of settlement. This payment is subject to the imposition of interest
from April 20, 1986, the date of transfer, to October 2, 1986, the date of
payment.
