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Act 2017-415 Relating to County and Municipal Allowable Interest Rate and Municipal Delivery Licenses and Issuance Fees

  • June 21, 2017

NOTICE

Act 2017-415 (https://revenue.alabama.gov/wp-content/uploads/2017/08/Act_2017-415.pdf), effective August 1, 2017, amends §11-3-11.3 and §11-51-208, removing the option for counties and municipalities to charge interest at the rate of one percent (1%) per month. The applicable interest rate to be charged by or due from the county/municipality shall be determined pursuant to §40-1-44, which links interest to the underpayment rate established quarterly by the United States Secretary of the Treasury under the authority of 26 U.S.C. §6621. The current quarterly interest rate is 4% APR (https://revenue.alabama.gov/assessments/quarterly-interest-rates/).

To comply with this change, the ONE SPOT system will be updated so that any delinquent non-state administered (NSA) local taxes filed through ONE SPOT where interest is currently being calculated at the 1% per month rate will continue to be calculated at 1% per month through July 31, 2017, after which the interest will be calculated at the “State rate” (linked to the Federal rate pursuant to §40-1-44) from August 1, 2017, through the filing of the delinquent tax.

EXAMPLES:

Prior to August 1, 2017, a county charges interest at 1% per month.

  • The county return due June 20, 2017, is filed/paid at 2:20 p.m. on September 15, 2017. The combined interest calculation will be at the old 1% per month rate for the time period of June 21-July 31 and then at the “State rate” from August 1 through September 15.
  • The county return due August 21, 2017, is filed/paid at 2:20 p.m. on October 15, 2017. Interest calculation will be at the “State rate” from August 22 through October 15.

The act also amends §11-51-194 regarding delivery licenses and issuance fees.

Click here to download a PDF version of this notice.