Illinois – Interest Rates and Credit Card Payment Provisions

SALT Report 2912 – Recently enacted legislation in Illinois amends the method for determining interest rates on taxes administered by the Department of Revenue and authorizes the Department to adopt rules regarding payments by credit card.

Determining Interest Rates

Beginning after December 31, 2013, interest paid or charged to taxpayers by the Department will be equal to the underpayment rate established by §6621 of the Internal Revenue Code. Prior to the amendment, interest was charged at the short-term federal rate for the one-year period beginning with the overpayment or underpayment.  After one year, interest was charged at a rate equal to the federal underpayment rate.

Filing Penalty

A $100 penalty will be imposed for failing to file a transaction reporting return required by Sec. 3 of the Retailers’ Occupation Tax Act or Sec. 9 of the Use Tax Act on or before the date the return is required. This penalty is in addition to any other statutorily imposed penalties and applies regardless of whether the return would result in the imposition of tax, had it been properly filed.

Credit Card Payments

The Department is authorized to adopt rules and regulations for all payments made by credit cards, when the Department is not required to pay a discount fee charged by the credit card issuer.

The provisions in House Bill 2518 were effective August 16, 2013.

For Further Information

Illinois General Assembly – House Bill 2518, Laws 2013