§ 3108 - Establishment of interest rate
§ 3108. Establishment of interest rate
(a) Not later than December 15 of each year, the commissioner shall establish a rate of interest applicable to unpaid tax liabilities and tax overpayments which shall be equal to the average prime rate charged by banks during the immediately preceding 12 months commencing on October 1 of the prior year, rounded upwards to the nearest whole percent. The annual rate thus established may be converted to a monthly rate which shall be rounded upwards to the nearest tenth of a percent. The rate established hereunder shall be effective on January 1 of the immediately following year. For purposes of this section, the term "prime rate charged by banks" shall mean the average predominate prime rate quoted by commercial banks to large businesses as determined by the board of governors of the Federal Reserve System.
(b) Whenever the commissioner is authorized or directed to pay interest on an overpayment of any taxes, nevertheless no interest shall be paid on such overpayment:
(1) where the commissioner finds that such overpayment was made with the intention or expectation of receiving a payment of interest thereon and for no other reason;
(2) for any period of time prior to: 45 days after the date the return was due, including any extensions of time thereto; or 45 days after the return was filed, whichever is the later date;
(3) in the case of overpayments which result from carrybacks, for a period of time prior to 45 days after the end of the tax year in which the event giving rise to the carryback occurred;
(4) to the extent the overpayment is paid at the direction of the taxpayer to a municipality for credit against the taxpayer's homestead property tax liabilities.
For the purposes of this subsection a return shall not be treated as filed until it is filed in processible form, which means that such return is filed on a permitted form and such return contains the taxpayer's name, address, and identifying number and the required signature and contains sufficient information (whether on the return or on required attachments) to permit the mathematical verification of the tax liability shown on the return.
The provisions of this subsection shall apply notwithstanding any other provision of law to the contrary. (Added 1981, No. 191, (Adj. Sess.), § 1; amended 1983, No. 59, § 2, eff. April 22, 1983; 1999, No. 49, § 75, eff. June 2, 1999; 2005, No. 185 (Adj. Sess.), § 4, eff. Jan. 1, 2007.)