Document Number
24-57
Bulletin Number
VTB 24-2
Tax Type
Income Tax
Description
Administration: Tax Bulletin - VIRGINIA'S INTEREST RATES WILL REMAIN THE SAME FOR THE THIRD QUARTER OF 2024
Topic
Interest Rates
Date Issued
05-24-2024

TAX BULLETIN 24-2
Virginia Department of Taxation

May 24, 2024

VIRGINIA’S INTEREST RATES WILL REMAIN THE SAME FOR THE THIRD QUARTER OF 2024

Federal Rates Remain Unchanged:  State and certain local interest rates are subject to change every quarter due to changes in federal rates established pursuant to Internal Revenue Code (“IRC”) § 6621. IRC § 6621 dictates that the federal underpayment and overpayment rates are three percentage points higher than the federal short-term rate. Federal rates for the third quarter of 2024 will be 8% for tax underpayments (assessments) and 8% for tax overpayments (refunds) by noncorporate taxpayers.  

Virginia Code § 58.1-15 provides that the underpayment rate for Virginia taxes will be 2% higher than the corresponding federal rate and the overpayment rate for Virginia taxes will be 2% higher than the federal overpayment rate for noncorporate taxpayers. Accordingly, the Virginia rates for the third quarter of 2024 will be 10% for tax underpayments (assessments) and 10% for tax overpayments (refunds).

Rate for Addition to Tax for Underpayments of Estimated Tax

Taxpayers whose taxable year ends on June 30, 2024: For the purpose of computing the addition to the tax for underpayment of Virginia estimated income taxes on Form 500C (for corporations), Form 760C (for individuals, estates and trusts), or Form 760F (for farmers and fishermen), the third quarter 10% underpayment rate will apply through the due date of the return, October 15, 2024.

Reduced Rate for Certain Assessments in Dispute

For administrative appeals filed with the Department of Taxation on or after July 1, 2011, a reduced interest rate equal to the federal short-term rate established pursuant to IRC § 6621(b) applies, beginning nine months after the date of assessment until a determination is issued. The federal short-term rate established pursuant to IRC § 6621(b) for the third quarter of 2024, rounded to the nearest whole percent, is 5%. Accordingly, the reduced rate for the third quarter of 2024 for qualifying assessments in dispute is 5%.

Local Tax

Assessments: Localities that assess interest on delinquent taxes under Va. Code § 58.1-3916 may impose interest at a rate not to exceed 10% for the first year of delinquency, and at a rate not to exceed 10% or the federal underpayment rate in effect for the applicable quarter, whichever is greater, for the second and subsequent years of delinquency. For the third quarter of 2024, the federal underpayment rate is 8%.

Refunds:  Localities that charge interest on delinquent taxes are required to pay interest to taxpayers on all overpayments or erroneously assessed taxes at the same rate as they charge interest on delinquent taxes under Va. Code § 58.1-3916.

Recent Interest Rates

Recent Interest Rates

Accrual Period

Overpayment (Refund)

Underpayment (Assessment)

Reduced

Rate

Beginning

Through

1-Jan-08

31-Mar-08

9%

9%

-

1-Apr-08

30-Jun-08

8%

8%

-

1-Jul-08

30-Sept-08

7%

7%

-

1-Oct-08

31-Dec-08

8%

8%

-

1-Jan-09

31-Mar-09

7%

7%

-

1-Apr-09

31-Dec-10

6%

6%

-

1-Jan-11

31-Mar-11

5%

5%

-

1-Apr-11

30-Sept-11

6%

6%

-

1-Oct-11

31-Mar-16

5%

5%

0%

1-Apr-16

31-Mar-18

6%

6%

1%

1-Apr-18

31-Dec-18

7%

7%

2%

1-Jan-19

30-Jun-19

8%

8%

3%

1-Jul-19

30-Jun-20

7%

7%

2%

1-Jul-20

31-Mar-22

5%

5%

0%

            1-Apr-22

30-Jun-22

6%

6%

1%

1-Jul-22

30-Sept-22

7%

7%

2%

1-Oct-22

31-Dec-22

8%

8%

3%

1-Jan-23

30-Sept-23

9%

9%

4%

1-Oct-23

30-Sept-24

10%

10%

5%

 

Additional Information: This Tax Bulletin, along with other reference documents, is available online in the Laws, Rules and Decisions section of the Department’s website, located at www.tax.virginia.gov. If you have questions about interest rates, please visit Virginia Tax’s website or contact the Department at 804.367.8031 (for individuals), 804.786.2450 (for Soft Drink Excise Tax and Aircraft Sales and Use Tax), or 804.367.8037 (for all other business taxes).

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Last Updated 06/05/2024 12:54