HB 1160 Summary

• Replaces fixed one percent monthly interest rate on tax refunds with a variable annual rate equal to the prime rate published in the Wall Street Journal on the first Monday in December of each year.

• Changes interest rate on unpaid tax and tax deficiencies from fixed rates to the same variable prime rate published annually, applicable January through December of each year.

• Maintains existing 45-day threshold for interest accrual on refunds from excess withholding and estimated tax overpayments, and other accrual periods for amended returns and carryback claims.

• Applies variable rate methodology to interest on underpayment of estimated tax by individuals, estates, and trusts, while preserving exemptions for corporations using annualized or adjusted seasonal methods.

• Effective for taxable years beginning after December 31, 2014.