The rate of interest effective July 1, 2010, through June 30, 2011, has been set at 7.25 percent, which is the same as for the current year (FY 2011)

Haston, William

English

The rate of interest effective July 1, 2011, through June 30, 2012, has been set at 7.25 percent, which is the same as for the current year (FY 2011)

University of Tennessee, Knoxville: Trace

University of Tennessee, Knoxville TRACE: Tennessee Research and Creative Exchange MTAS Publications: Hot Topics Municipal Technical Advisory Service (MTAS) 8-19-2011 Hot Topic: Interest Rate Set at 7.25 Percent Effective July 1, 2011, on Delinquent Taxes Collected or Administered by the State of Tennessee William Haston Municipal Technical Advisory Service Follow this and additional works at: https://trace.tennessee.edu/utk_mtastop  Part of the Public Administration Commons The MTAS publications provided on this website are archival documents intended for informational purposes only and should not be considered as authoritative. The content contained in these publications may be outdated, and the laws referenced therein may have changed or may not be applicable to your city or circumstances. For current information, please visit the MTAS website at: mtas.tennessee.edu. Recommended Citation Haston, William, "Hot Topic: Interest Rate Set at 7.25 Percent Effective July 1, 2011, on Delinquent Taxes Collected or Administered by the State of Tennessee" (2011). MTAS Publications: Hot Topics. https://trace.tennessee.edu/utk_mtastop/12 This Bulletin is brought to you for free and open access by the Municipal Technical Advisory Service (MTAS) at TRACE: Tennessee Research and Creative Exchange. It has been accepted for inclusion in MTAS Publications: Hot Topics by an authorized administrator of TRACE: Tennessee Research and Creative Exchange. For more information, please contact trace@utk.edu. August 19, 2011INTEREST RATE SET AT 7.25 PERCENT EFFECTIVE JULY 1, 2011, ON DELINQUENT TAXES COLLECTED OR ADMINISTERED BY THE STATE OF TENNESSEEWilliam Haston, CGFM, Finance and Accounting Consultant #214hot topicMunicipal Technicaladvisory service...in cooperation with theTennessee Municipal LeagueThe payment of taxes to local municipalities or to the state of Tennessee generally has a due date associated with it. If a taxpayer fails to pay the tax, or a portion thereof, on or before the date the taxes are required to be paid, interest is added to the amount of tax due. The commissioner of revenue determines the interest rate for delinquent taxes collected or administered by the state of Tennessee. Sales tax and local business tax are examples of taxes falling into this category.FORMULA RATE OF INTERESTT.C.A. § 67-1-801 provides for the rate of interest to be charged on delinquent tax payments. This rate is called the “formula rate of interest” and is determined and set annually by the Tennessee commissioner of revenue. The rate effective  July 1, 2011, through June 30, 2012, has been set at 7.25 percent. Municipalities will recognize that this rate is the same as for the current year (FY 2011).  A copy of the announcement by the Commissioner of Revenue can be found at http://tn.gov/sos/pub/tar/announcements/06-20-11.pdf. ACTION REQUIRED BY MUNICIPAL FINANCE STAFFFinance directors, city recorders and other finance office personnel responsible for collecting or remitting delinquent taxes collected or administered by the state of Tennessee should review the interest rate currently used for delinquent accounts and  make the necessary adjustments to comply with the  7.25 percent rate effective July 1, 2011.HISTORICAL INTEREST RATESThe table on the following page from the Tennessee Department of Revenue is a historical presentation of the “formula rate of interest” as determined by the commissioner of revenue. This information is provided as supplemental data to give finance officials a perspective of interest rates for prior years.OTHER ASSISTANCEContact your MTAS municipal management or finance consultant for further assistance in this matter. You may also call the Tennessee Department of Revenue toll free at (800) 342-1003 or  (615) 253-0600. Visit the MTAS Web site at  www.mtas.tennessee.edu or the Department of Revenue Web site at www.state.tn.us/revenue/  for further information.Knoxville (Headquarters) . . . (865) 974-0411 Martin. . . . . . . . . . . . . . . . . . (731) 881-7055Jackson. . . . . . . . . . . . . . . . . . (731) 423-3710  Nashville  . . . . . . . . . . . . . . . (615) 532-6827Johnson City . . . . . . . . . . . . . (423) 854-9882 The Municipal Technical Advisory Service (MTAS) is a statewide agency of the University of Tennessee Institute for Public Service. MTAS operates in cooperation with the Tennessee Municipal League to provide technical assistance services to officials of Tennessee’s incorporated municipalities. Assistance is offered in areas such as accounting, administration, finance, public works, ordinance codification, and water and wastewater management.MTAS Hot Topics are information briefs that provide a timely review of current issues of interest to Tennessee municipal officials. Hot Topics are free to Tennessee local, state, and federal government officials and are available to others for $2 each. Photocopying of this publication in small quantities for educational purposes is encouraged. For permission to copy and distribute large quantities, please contact the MTAS Knoxville office at (865) 974-0411.www.mtas.tennessee.eduThe University of Tennessee is an EEO/AA/Title VI/Title IX/Section 504/ADA/ADEA institution.MTAS1616 • E14-1050-000-014-12Municipal Technical advisory serviceAugust 19, 2011INTEREST RATE SET AT 7.25 PERCENT EFFECTIVE JULY 1, 2011, ON DELINQUENT TAXES COLLECTED OR ADMINISTERED BY THE STATE OF TENNESSEEMunicipal Technicaladvisory service     PERIOD COVERED  RATE                            PERIOD COVERED  RATE     Through - 9/30/1974  6.00%  7/1/1996 - 6/30/1997 12.25%10/1/1974 - 7/31/1980  8.00%  7/1/1997 - 6/30/1998 12.50%8/1/1980 - 6/30/1983 10.00%  7/1/1998 - 6/30/1999 12.50%7/1/1983 - 6/30/1984 14.50%  7/1/1999 - 6/30/2000 11.75%7/1/1984 - 6/30/1985 16.00%  7/1/2000 - 6/30/2001 13.50%7/1/1985 - 6/30/1986 14.50%  7/1/2001 - 6/30/2002 11.00%7/1/1986 - 6/30/1987 14.50%  7/1/2002 - 6/30/2003  8.75%7/1/1987 - 6/30/1988 12.25%  7/1/2003 - 6/30/2004  8.25%7/1/1988 - 6/30/1989 13.00%  7/1/2004 - 6/30/2005  8.00%7/1/1989 - 6/30/1990 15.50%  7/1/2005 - 6/30/2006 10.00%7/1/1990 - 6/30/1991 14.00%  7/1/2006 - 6/30/2007 12.00%7/1/1991 - 6/30/1992 12.50%  7/1/2007 - 6/30/2008 12.25%7/1/1992 - 6/30/1993 10.50%  7/1/2008 - 6/30/2009  9.00%7/1/1993 - 6/30/1994 10.00%  7/1/2009 - 6/30/2012  7.25%7/1/1994 - 6/30/1995 11.25%      7/1/1995 - 6/30/1996 13.00%      INTEREST RATE HISTORY DELINQUENT TAXES OF ALL TYPEST.C.A. § 67-1-801(a)(1-3)

Hot Topic: Interest Rate Set at 7.25 Percent Effective July 1, 2011, on Delinquent Taxes Collected or Administered by the State of Tennessee

University of Tennessee, Knoxville Trace: Tennessee Research and Creative Exchange MTAS Publications: Hot Topics Municipal Technical Advisory Service (MTAS) 6-30-2010 Hot Topic: Interest Rate Set at 7.25 Percent Effective July 1, 2010, on Delinquent Taxes Collected or Administered by the State of Tennessee William Haston Municipal Technical Advisory Service Follow this and additional works at: https://trace.tennessee.edu/utk_mtastop  Part of the Public Administration Commons The MTAS publications provided on this website are archival documents intended for informational purposes only and should not be considered as authoritative. The content contained in these publications may be outdated, and the laws referenced therein may have changed or may not be applicable to your city or circumstances. For current information, please visit the MTAS website at: mtas.tennessee.edu. Recommended Citation Haston, William, "Hot Topic: Interest Rate Set at 7.25 Percent Effective July 1, 2010, on Delinquent Taxes Collected or Administered by the State of Tennessee" (2010). MTAS Publications: Hot Topics. https://trace.tennessee.edu/utk_mtastop/19 This Bulletin is brought to you for free and open access by the Municipal Technical Advisory Service (MTAS) at Trace: Tennessee Research and Creative Exchange. It has been accepted for inclusion in MTAS Publications: Hot Topics by an authorized administrator of Trace: Tennessee Research and Creative Exchange. For more information, please contact trace@utk.edu. June 30, 2010INTEREST RATE SET AT 7.25 PERCENT EFFECTIVE JULY 1, 2010, ON DELINQUENT TAXES COLLECTED OR ADMINISTERED BY THE STATE OF TENNESSEEWilliam Haston, CGFM, Finance and Accounting Consultant        #198hot topicMunicipal Technicaladvisory service...in cooperation with theTennessee Municipal LeagueThe payment of taxes to local municipalities or to the state of Tennessee generally has a due date associated with it. If a taxpayer fails to pay the tax, or a portion thereof, on or before the date the taxes are required to be paid, interest is added to the amount of tax due. The commissioner of revenue determines the interest rate for delinquent taxes collected or administered by the state of Tennessee. Sales tax and local business tax are examples of taxes falling into this category.FORMULA RATE OF INTERESTT.C.A. § 67-1-801 provides for the rate of interest to be charged on delinquent tax payments. This rate is called the “formula rate of interest” and is determined and set annually by the Tennessee commissioner of revenue. The rate effective July 1, 2010, through June 30, 2011, has been set at 7.25 percent. Municipalities will recognize that this rate is the same as for the current year (FY 2010).DELINQUENT BUSINESS TAXESMunicipalities that levy and collect any local business tax should use the 7.25 percent rate of interest to calculate any interest due from taxpayers who file delinquent business tax returns for periods prior to January 1, 2010. Taxes due accrue interest from the delinquent date until paid. For periods prior to the date of tax assessment, interest will accrue at the prevailing rate (7.25 percent) regardless of the taxable period involved (T.C.A. § 67-1-801(a)(2)).Important Note: The Tennessee General Assembly adopted a measure that the Department of Revenue will collect all local option business taxes levied in accordance with T.C.A. §§ 67-4-701 et.seq. The commissioner of revenue has broad discretion to transition the administration of the program. Municipalities will continue to  have some local jurisdiction over the business tax program. They will be responsible for issuing new business licenses, issuing renewal licenses upon notification from the state that the tax has been paid, and also be responsible for the collection of delinquent business taxes. Should a municipality choose to turn delinquent collection of business license tax over to the Department of Revenue the full amount collected would revert to the Department of Revenue.ACTION REQUIRED BY MUNICIPAL FINANCE STAFFFinance directors, city recorders, and other finance office personnel responsible for collecting local business tax should review the interest rate currently June 30, 2010INTEREST RATE SET AT 7.25 PERCENT EFFECTIVE JULY 1, 2010, ON DELINQUENT TAXES COLLECTED OR ADMINISTERED BY THE STATE OF TENNESSEEMunicipal Technicaladvisory serviceused for delinquent accounts and make the necessary adjustments to comply with the 7.25 percent rate effective July 1, 2010.HISTORICAL INTEREST RATESThe following table, from the Tennessee Department of Revenue, is a historical presentation of the “formula rate of interest” as determined by the commissioner of revenue. This information is provided as supplemental data to give finance officials a perspective of interest rates for prior years.INTEREST RATE HISTORY – DELINQUENT TAXES OF ALL TYPEST.C.A. § 67-1-801(a)(1-3)                      PERIOD COVERED                      RATE                           PERIOD COVERED                      RATE Through  9/30/1974 6.00% 7/1/1996 - 6/30/1997 12.25% 10/1/1974 - 7/31/1980 8.00% 7/1/1997 - 6/30/1998 12.50% 8/1/1980 - 6/30/1983 10.00% 7/1/1998 - 6/30/1999 12.50% 7/1/1983 - 6/30/1984 14.50% 7/1/1999 - 6/30/2000 11.75% 7/1/1984 - 6/30/1985 16.00% 7/1/2000 - 6/30/2001 13.50% 7/1/1985 - 6/30/1986 14.50% 7/1/2001 - 6/30/2002 11.00% 7/1/1986 - 6/30/1987 14.50% 7/1/2002 - 6/30/2003 8.75% 7/1/1987 - 6/30/1988 12.25% 7/1/2003 - 6/30/2004 8.25% 7/1/1988 - 6/30/1989 13.00% 7/1/2004 - 6/30/2005 8.00% 7/1/1989 - 6/30/1990 15.50% 7/1/2005 - 6/30/2006 10.00% 7/1/1990 - 6/30/1991 14.00% 7/1/2006 - 6/30/2007 12.00% 7/1/1991 - 6/30/1992 12.50% 7/1/2007 -  6/30/2008 12.25% 7/1/1992 - 6/30/1993 10.50% 7/1/2008 - 6/30/2009 9.00% 7/1/1993 - 6/30/1994 10.00% 7/1/2009 - 6/30/2010  7.25% 7/1/1994 - 6/30/1995 11.25% 7/1/2010 - 6/30/2011 7.25% 7/1/1995 - 6/30/1996 13.00% Knoxville (Headquarters)  . . .(865) 974-0411 Nashville  . . . . . . . . . . . . . . . (615) 532-6827Johnson City . . . . . . . . . . . . . .(423) 854-9882 Martin. . . . . . . . . . . . . . . . . . (731) 881-7055Jackson . . . . . . . . . . . . . . . . . .(731) 423-3710The Municipal Technical Advisory Service (MTAS) is a statewide agency of the University of Tennessee Institute for Public Service. MTAS operates in cooperation with the Tennessee Municipal League to provide technical assistance services to officials of Tennessee’s incorporated municipalities. Assistance is offered in areas such as accounting, administration, finance, public works, ordinance codification, and water and wastewater management.MTAS Hot Topics are information briefs that provide a timely review of current issues of interest to Tennessee municipal officials. Hot Topics are free to Tennessee local, state, and federal government officials and are available to others for $2 each. Photocopying of this publication in small quantities for educational purposes is encouraged. For permission to copy and distribute large quantities, please contact the MTAS Knoxville office at (865) 974-0411.www.mtas.tennessee.eduThe University of Tennessee is an EEO/AA/Title VI/Title IX/Section 504/ADA/ADEA institution.MTAS1494 • E14-1050-000-004-11Municipal Technical advisory serviceMunicipal Technicaladvisory serviceJune 30, 2010INTEREST RATE SET AT 7.25 PERCENT EFFECTIVE JULY 1, 2010, ON DELINQUENT TAXES COLLECTED OR ADMINISTERED BY THE STATE OF TENNESSEEOTHER ASSISTANCEContact your MTAS municipal management or finance consultant for further assistance in this matter. You may also call the Tennessee Department of Revenue toll free at (800) 342-1003 or (615) 253-0600. Visit the MTAS Web site at www.mtas.tennessee.edu or the Department of Revenue Web site at www.state.tn.us/revenue/ 

Hot Topic: Interest Rate Set at 7.25 Percent Effective July 1, 2010, on Delinquent Taxes Collected or Administered by the State of Tennessee

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Hot Topic: Interest Rate Set at 7.25 Percent Effective July 1, 2010, on Delinquent Taxes Collected or Administered by the State of Tennessee

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University of Tennessee, Knoxville: Trace

University of Tennessee, Knoxville: Trace