October 13, 2009
FOR IMMEDIATE RELEASE
Attention Business Editor
Contact: Bob Rogers, Iowa Department of Revenue, 515.281.5771
IOWA REVENUE DEPARTMENT SETS 2010 INTEREST RATE
DES MOINES - The Iowa Department of Revenue announces that the annual interest rate in 2010 will be 5.0 percent. The monthly interest rate will be 0.4 percent. The new rates are a decrease in the interest rates that were imposed by the Department for tax year 2009, which were 8.0 percent annually and 0.7 percent monthly.
By statute, the Department’s interest rate is based on the average prime rate charged by banks on short-term business loans between October 2008 and September 2009. The prime rate fell from October through the middle of December, before leveling off. In addition, the prime rate in each month was lower than the prime rate in the corresponding month last year by a range of 1.75 points to 3.73 points.
The Department charges interest on taxes that are overdue; income, sales, and withholding taxes are included. In addition, the Department pays interest to taxpayers who file their individual income tax returns on time but do not receive their refunds by June 1. Late refunds of other taxes are paid with interest as well.
The revised Department annual and monthly rates are effective beginning January 1, 2010, for taxes which are overdue and for late refunds payable at that time. The new interest rates continue to apply for overdue taxes and late refunds through December 31, 2010.