KRS 131.183 — Tax interest rate

(1) (a) Except for the addition to tax required when an underpayment of estimated tax
occurs under KRS 141.044 and 141.305, all taxes payable to the
Commonwealth not paid at the time prescribed by statute shall accrue interest
at the tax interest rate.
(b) 1. a. Except as provided by subparagraph 2 of this paragraph, the tax
interest rate shall be equal to the adjusted prime rate charged by
banks rounded to the nearest full percent as adjusted by subsection
(2) of this section.
b. The commissioner of revenue shall adjust the tax interest rate not
later than November 15 of each year if the adjusted prime rate
charged by banks during September of that year, rounded to the
nearest full percent, is at least one (1) percentage point more or
less than the tax interest rat e which is then in effect. The adjusted
tax interest rate shall become effective on January 1 of the
immediately succeeding year.
2. For additional tax billed in accordance with KRS 136.180(2), the tax
interest rate shall be equal to the federal short -term rate applicable to
each quarter of the period that begins on the date the protest was filed by
the taxpayer under KRS 131.110 and ends on the due date of the tax as
stated on the final tax bill. The federal short -term rate for each quarter
shall be the fe deral short -term rate determined by the Secretary of the
Treasury under Section 6621(b) of the Internal Revenue Code of 1986 or
equivalent section in case of amendment. The two percent (2%)
adjustment provided by subsection (2)(a) of this section shall not apply
to the interest rate determined under this subparagraph.
(2) (a) 1. All taxes payable to the Commonwealth that have not been paid at the
time prescribed by statute shall accrue interest at the tax interest rate as
determined in accordance with subsection (1) of this section until May 1,
2008.
2. Beginning on May 1, 2008, all taxes payable to the Commonwealth that
have not been paid at the time prescribed by statute shall accrue interest
at the tax interest rate as determined in accordance with subsection (1) of
this section plus two percent (2%).
(b) 1. Interest shall be allowed and paid upon any overpayment as defined in
KRS 134.580 in respect of any of the taxes provided for in Chapters
131, 132, 134, 136, 137, 138, 139, 140, 141, 142, 143, 143A, an d 243 of
the Kentucky Revised Statutes and KRS 160.613 and 160.614 at the rate
provided in subsection (1) of this section until May 1, 2008.
2. Beginning on May 1, 2008, interest shall be allowed and paid upon any
overpayment as defined in KRS 134.580 at t he rate provided in
subsection (1) of this section minus two percent (2%).
3. Effective for refunds issued after April 24, 2008, except for the
provisions of KRS 138.351, 141.044(2), 141.235(3), and subsection (3)
of this section, interest authorized under this subsection shall begin to
accrue sixty (60) days after the latest of:
a. The due date of the return;
b. The date the return was filed;
c. The date the tax was paid;
d. The last day prescribed by law for filing the return; or
e. The date an amended return claiming a refund is filed.
(c) In no case shall interest be paid in an amount less than five dollars ($5).
(d) No refund shall be made of any estimated tax paid unless a return is filed as
required by KRS Chapter 141.
(3) Effective for refund claims filed on or after July 15, 1992, if any overpayment of the
tax imposed under KRS Chapter 141 results from a carryback of a net operating loss
or a net capital loss, the overpayment shall be deemed to have been made on the
date the cla im for refund was filed. Interest authorized under subsection (2) of this
section shall begin to accrue ninety (90) days from the date the claim for refund was
filed.
(4) No interest shall be allowed or paid on any sales tax refund as provided by KRS
139.536.
(5) For purposes of this section, any addition to tax provided in KRS 141.044 and
141.305 shall be considered a penalty.