Idaho Administrative Code
Title IDAPA 35 - Tax Commission, State
Rule 35.01.02 - IDAHO SALES AND USE TAX ADMINISTRATIVE RULES
Section 35.01.02.122 - INTEREST ON DEFICIENCIES, REFUNDS AND ESTIMATED RETURNS
Current through September 2, 2024
Sections 28-22-104, 63-3045, 63-3630, Idaho Code
01. Interest Rate. The rate of interest on deficiencies or refunds of tax is determined annually as provided in Section 63-3045, Idaho Code, and IDAPA 35.02.01, "Tax Commission Administration and Enforcement Rules," Rule 310. All interest on sales or use tax deficiencies is simple interest. Interest applies only to tax and not to penalties.
02. Interest Accruing During a Period Subject to Audit. Interest on deficiencies accrues from the due date of the return to which the deficiency relates. On refunds, the interest accrues from the due date of the return or date of payment, whichever is later. However, when a refund is claimed or a deficiency is asserted for a period of time which includes several reporting periods, in lieu of calculating interest for each reporting period, interest may be averaged over the interest rate period if no substantial distortion results from the averaging technique. When averaging interest, sales or purchases of extraordinary amounts outside the usual course of business which would substantially distort the result should be excluded from the averaging calculation and interest calculated separately on such transactions. Average interest, accruing during an interest rate period, may be calculated according to the following formula:
N = Number of reporting periods in interest rate period.
R = Interest rate per reporting period, e.g., one percent (1%) for monthly filers, three percent (3%) for quarterly filers, at a 12% annual interest rate, etc.
03. Alternate Formulas. Alternatively, interest may be calculated according to such other formula as the taxpayer and the Commission's sales tax audit staff may agree to apply.
04. Estimated Returns. Interest on estimated returns accrues at an annual rate as provided in Section 63-3045, Idaho Code, and IDAPA 35.02.01, "Tax Commission Administration and Enforcement Rules," Rule 310.
05. Failure to Register. Taxpayers who failed to have a tax number in a period where a deficiency exists will be, for interest computation purposes, considered to be monthly filers.
06. Judgments. Nothing in this rule is intended to effect interest rates on judgments pursuant to Section 28-22-104(2), Idaho Code.
Effective March 31, 2022
