IDAPA 35.01.02.122 — INTEREST ON DEFICIENCIES, REFUNDS AND ESTIMATED RETURNS (RULE 122)

Sections 28-22-104, 63-3045, 63-3630, Idaho Code
01.
Interest Rate. The rate of interest on deficiencies or refunds of tax is determined annually as
provided in Section 63-3045, Idaho Code, and IDAPA 35.02.01, "Tax Commission Administration and Enforcement
Rules," Rule 310. All interest on sales or use tax deficiencies is simple interest. Interest applies only to tax and not to
penalties.
(3-31-22)
02.
Interest Accruing During a Period Subject to Audit. Interest on deficiencies accrues from the
due date of the return to which the deficiency relates. On refunds, the interest accrues from the due date of the return
or date of payment, whichever is later. However, when a refund is claimed or a deficiency is asserted for a period of
time which includes several reporting periods, in lieu of calculating interest for each reporting period, interest may be
averaged over the interest rate period if no substantial distortion results from the averaging technique. When
averaging interest, sales or purchases of extraordinary amounts outside the usual course of business which would
substantially distort the result should be excluded from the averaging calculation and interest calculated separately on
such transactions. Average interest, accruing during an interest rate period, may be calculated according to the
following formula:
N = Number of reporting periods in interest rate period.
R = Interest rate per reporting period, e.g., one percent (1%) for monthly filers, three percent (3%) for
quarterly filers, at a 12% annual interest rate, etc.
(3-31-22)
03.
Alternate Formulas. Alternatively, interest may be calculated according to such other formula as
the taxpayer and the Commission's sales tax audit staff may agree to apply.
(3-31-22)
04.
Estimated Returns. Interest on estimated returns accrues at an annual rate as provided in Section
63-3045, Idaho Code, and IDAPA 35.02.01, "Tax Commission Administration and Enforcement Rules," Rule 310.
(3-31-22)
05.
Failure to Register. Taxpayers who failed to have a tax number in a period where a deficiency
exists will be, for interest computation purposes, considered to be monthly filers.
(3-31-22)
06.
Judgments. Nothing in this rule is intended to effect interest rates on judgments pursuant to
Section 28-22-104(2), Idaho Code.
(3-31-22)