Bulletin Number
VTB 91-5
Tax Type
Corporation Income Tax
Description
Corporation Income Tax: Late Filing Penalty
Topic
Penalties and Interest
Returns and Payments
Date Issued
04-01-1991
Tax Bulletin 91-5
CORPORATION INCOME TAX: LATE FILING PENALTY
Effective for taxable years beginning on and after January 1, 1990, a penalty will be imposed for late filing of certain corporation income tax returns.
Computation of the Penalty
Pursuant to Va. Code §58.1-450, the penalty is assessed on the tax due with the return at a rate of 5% per month or fraction thereof, from the due date of the return until the date the return is filed. The maximum penalty is 25% of the tax due. The minimum penalty is $100. (Effective July 1, 1991, the penalty increases to 6% per month to a maximum of 30%. The $100 minimum is unchanged.)
The minimum penalty will be assessed in the following cases:
-
- 1. When an electing small business corporation (S corporation) files its Virginia Form 500S after the required due date; and
2 When any other corporation files its Virginia Form 500 after the required due date, the return shows a balance of tax due, and the penalty computed at the 5% to 25% rate is less than $100.
- 1. When an electing small business corporation (S corporation) files its Virginia Form 500S after the required due date; and
Example
A corporation files its return for the calendar year 1990 on May 15, 1991, one month after the due date. The return shows a balance of tax due in the amount of $1,500. Since the application of the 5% monthly rate yields a penalty of only $75 (1,500 x 5%), the $100 minimum penalty will be assessed in lieu of the 5% penalty.
However, if the return in this case is filed two months after the due date, the application of the 5% rate over a two-month period will yield a penalty of $150 (1,500 x 10%); therefore, the minimum penalty will not apply.
Cases Where the Minimum Penalty Does Not Apply
The minimum penalty will not be imposed in cases where the Virginia Form 500, although filed late, reflects either a refund or no balance of tax due.
For additional information: Contact the Taxpayer Assistance Section, Office Services Division, Virginia Department of Taxation, P. O. Box 6-L, Richmond, Virginia 23282, (804) 367-8036.
Tax Bulletins