Virginia Administrative Code
Title 23 - TAXATION
Agency 10 - DEPARTMENT OF TAXATION
Chapter 20 - GENERAL PROVISIONS APPLICABLE TO ALL TAXES ADMINISTERED BY THE DEPARTMENT OF TAXATION
Section 23VAC10-20-60 - Rate of interest
Current through Register Vol. 41, No. 3, September 23, 2024
A. In general. The Internal Revenue Code requires that interest accruing be compounded daily. Although Virginia uses the nominal interest rate established pursuant to IRC § 6621, Virginia applies simple interest computations without compounding.
B. Interest is computed by excluding the due date and including the date of payment in the number of days. For example, interest on $100 tax due June 20, 1983, and paid July 10, 1983, would be computed as follows:
June 21 through June 30 = 10 days at 16%
|
10 |
x 0.16 = 0.004383 |
|
|
365 |
July 1 through July 10 = 10 days at 11%
|
10 |
x 0.11 = 0.003013 |
|
|
365 |
Total Interest Factor 0.007396 x $100 = $0.74 interest
Note that June 20, the due date, is not counted, and that July 10 and all intervening days are counted.
C. See § 58.15 of the Code of Virginia for provisions defining rates of interest and methods to determine interest and additions to tax.
Statutory Authority: § 58.1-203 of the Code of Virginia.
