Texas – 2012 Interest Rate for Credits, Refunds and Taxes Due

SALT Report 1330 – The Texas Comptroller has released their 2012 interest rate schedule for all past due taxes, taxes paid in error, or credits. The rate for 2012 is set at 4.25% which is 1% over the prime rate that was published in the Wall Street Journal on the first business day of the year.

Interest Owed

Past-due taxes are charged interest beginning sixty-one days after the due date.  You can calculate the interest you owe by multiplying the interest rate by the tax due by the number of days interest accrues, then dividing that total by the number of days in a year (365 days or 366 for leap years).

For example, if you owe $1000 in taxes at a rate of 4.25% (.0425) for 150 days and divide that number by 365 (days in a year), the interest owed would be $17.47.
Interest Earned
As a result of legislation (SB 1570) passed in the 79th Regular Legislative Session, refund claims filed on or after September 1, 2005 accrue credit interest at either Treasury Pool rate or Prime +1, whichever is less.
Credit Interest
Taxpayers can receive interest on refunds and transfers of taxes paid in error. The interest begins to accrue 60 days after the date of the payment or the due date of the tax report, whichever is later. Credit interest does not accrue for report periods prior to January 1, 2000. As of September 1, 2005, the credit interest rate for tax refunds is the lesser of:
The annual rate earned on deposits in the state treasury during December of the previous calendar year; or
1% over the prime interest rate published in the Wall Street Journal on the first business day of the year.
The interest rate is determined by the date of the refund claim. The claim can be in the form of an amended tax return, a request for a transfer of the credit to another period, or request for a refund. A request postmarked prior to September 1, 2005, accrues interest at the old rate, prime plus 1%. A request that occurs on or after September 1, 2005, accrues interest at the lesser of the two rates described above.
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