Illinois Administrative Code › Title 86 - REVENUE › Part 700 - UNIFORM PENALTY AND INTEREST ACT › Subpart A - SCOPE AND APPLICATION OF THE ACT › Section 700.110 - Application of the Provisions of the UPIA and this Part (UPIA Section 3-9)

Current through Register Vol. 48, No. 28, July 12, 2024
a) The UPIA and
				this Part are effective January 1, 1994 and the provisions of the UPIA and this
				Part
apply to the rates of interest for periods on and after the
				effective date of the UPIA
and this Part. (UPIA Section
				3-9(a))
b) Interest Charged
1) For periods subsequent to the effective
				date of the UPIA, the initial rate charged taxpayers by the Department for
				failure to remit taxes when due is the interest
rate in effect at the
				time the liability
to the Department accrued, subject to semiannual
				adjustment pursuant to UPIA Section 3-2(b). (See UPIA Section 3-9(6).)
EXAMPLE 1: A taxpayer is required to file a monthly return
				  with the Department pursuant to the Automobile Renting Occupation and Use Tax
				  Act [35 ILCS 155] on March 20, 1994 for rental receipts from rentals that were
				  received in February 1994. The taxpayer did not remit the tax to the Department
				  when due on March 20, 1994. The interest rate to be charged the taxpayer is the
				  interest rate in effect on March 20, 1994.
EXAMPLE 2: A taxpayer is required to file an income tax
				  withholding return for the fourth quarter of 1993 with remittance. The return
				  is filed before the due date of January 30, 1994 but tax is not fully paid
				  until March 15, 1994. The interest rate will be the rate in effect on January
				  30, 1994 and will accrue through March 15, 1994, when the tax is paid.
EXAMPLE 3: A taxpayer is required to file a first quarter of
				  1994 quarterly withholding return on or before April 30, 1994. The taxpayer had
				  withholding during this period but did not remit the withholding payment to the
				  Department until June 15, 1994. The interest rate to be charged the Taxpayer is
				  the interest rate in effect on April 30, 1994. This same rate is charged
				  through June 15, 1994, the date the tax was paid.
EXAMPLE 4: Assume the same fact situation as in Example 3,
				  but payment is not received until August 15, 1994. The interest rate in effect
				  on April 30, 1994 is charged through June 30, 1994. A new rate is charged from
				  July 1, 1994 through August 15, 1994, the date the tax was paid.
EXAMPLE 5: Corporation filed its calendar 1993 corporate
				  income tax return on October 15, 1994 (the extended due date of the return
				  under Section
				  100.5020(b)
				  ) with a payment for the total tax liability shown on the return attached. No
				  estimated payments had been made. The taxpayer is charged interest on the
				  underpayment of tax from March 15, 1994 (the unextended due date of the return)
				  through June 30, 1994 at the rate in effect for the first semiannual period of
				  1994 and from July 1, 1994 through October 15, 1994 at the rate in effect for
				  the second semiannual period of 1994.
2)
Interest for periods prior to the
				effective date of the Act shall be computed at the rates in effect prior to
				that date.
(UPIA Section 3-9(a))
EXAMPLE 1: A taxpayer's Retailers' Occupation Tax return for
				  the July 1981 month liability period was due August 31, 1981. The taxpayer was
				  audited and an additional liability was assessed. The interest rate charged the
				  taxpayer on this liability was 1% per month prior to September 17, 1981, and at
				  the rate of 2% per month on and after September 17, 1981 and prior to January
				  1, 1987; and at the rate of
				  1.25 % per month
				  on and after January 1, 1987 and prior to January 1, 1994 (see ROTA Section 5,
				  prior to amendment by P.A. 87-205); and at the semiannually adjusted daily
				  interest rate imposed pursuant to the Act and this Part from January 1, 1994
				  through the date the tax is paid.
EXAMPLE 2: A taxpayer's Retailers' Occupation Tax return for
				  the October 1993 liability period was due November 20, 1993. The return was
				  filed and tax was paid on January 15, 1994. The interest rate charged on the
				  liability was 1.25% per month for November 21, 1993 through December 20, 1993
				  and 1.25% for December 21, 1993 through December 31, 1993 (see ROTA Section 5,
				  prior to amendment by P.A. 87-205); and at the semiannually adjusted daily
				  interest rate imposed pursuant to the Act and this Part from January 1, 1994
				  through January 15, 1994, the date the tax was paid.
EXAMPLE 3: A withholding tax agent has income tax withholding
				  liability for the first quarter of 1986 that was due by April 30, 1986, but was
				  not paid until August 15, 1994. The interest rate charged the taxpayer was 10%
				  per annum for the period May 1, 1986 through June 30, 1986, 9% per annum for
				  the period July 1, 1986 through December 31, 1993 (see IITA Section 1003, prior
				  to amendment by P.A. 87-205), and at the semiannually adjusted interest rate
				  imposed pursuant to the UPIA and this Part from January 1, 1994 through August
				  15, 1994, the date the tax was paid.
EXAMPLE 4: Corporation filed its calendar 1992 corporate
				  income tax return on October 15, 1993 (the extended due date of the return
				  under Section
				  100.5020(b)
				  ). No estimated payments had been made and no payment accompanied the return.
				  The taxpayer would be charged interest at a rate of 9% per annum from March 15,
				  1993 (the unextended due date of the return) through December 31, 1993 (see
				  IITA Section 1003, prior to amendment by P.A. 87-205) and at the semiannual
				  adjusted rate imposed pursuant to the UPIA and this Part from January 1, 1994
				  through the date paid.