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General Revenue Provisions

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Mailing Date

If a due date falls on a Saturday, Sunday or legal holiday, the due date is extended until the next business day. Returns mailed through the U.S. mail shall be deemed filed and received by the department on the date shown by the post office cancellation mark on the envelope. If the post office cancellation mark is illegible, erroneous or omitted, the date received stamped by the department will be used to determine if the return was timely filed. (Note: Those taxpayers required to make payment in immediately available funds must do so in a manner that makes the funds immediately available to the state no later than the due date.)

Penalties and Penalty Waivers

Penalty is imposed for the late filing of a tax return and/or late payment of taxes owed the state. Penalty is computed at the rate of 5% per month, or any fractional part thereof, from the due date to the date the taxes are paid. The maximum penalty is 25% of the taxes due, and the minimum is $15. Penalties may be waived in delinquency or deficiency cases if the taxpayer had one of several reasonable causes listed in the statute. Waivers can also be issued in delinquency cases if the taxpayer has a good two-year filing record with the department and no willful disregard of the law or gross negligence is involved. Petitions for waiver of penalties must be submitted in writing by the taxpayer and will be reviewed by the commissioner or her delegate. Waiver of penalty exceeding $15,000 must be approved by the attorney general.

Interest

Interest is imposed on any taxes not paid by the statutory due date even if an extension of time has been granted. The interest rate is announced on July 1 each year by the commissioner. The current interest rate is computed from the due date to the date the taxes are paid. Interest cannot be waived. Information about the current interest rates can be found here.

Refunds

Taxpayers may claim a refund for any taxes overpaid provided that a claim with proper proof is filed within three years from December 31 of the year in which the payment was made. Overpayments reflected on a franchise and excise tax return as a result of pre-payments and claimed for refund by the taxpayer will be construed as a valid claim for refund by the department. Corporate taxpayers have the option to apply franchise and excise taxes overpayments as a credit to next year's estimated tax liability. Corporate taxpayers should allow four to six weeks processing for a refund check to be issued. Interest at the same rate of assessments will be paid on any refund not made within 45 days from the date received by the department. Claims over $15,000 must be approved by the attorney general.

Audits and Assessments

Generally, all tax returns filed with the Department of Revenue are subjected to some type of office audit or examination to ensure that the appropriate taxes have been paid. An office audit consists of a computer math audit and/or a manual examination of the return by a trained auditor or technician. If additional information is needed to complete an audit, the taxpayer will be contacted by the department. The taxpayer will be notified in writing of any adjustment(s) made to the return.

If a taxpayer is selected for a field audit, he or she will be contacted by the department to set up a time for the audit which will be convenient to the taxpayer. The taxpayer will be advised in advance of the records needed for the field audit. A field audit usually involves tax returns filed for the previous three years. When the audit is completed, the auditor will leave a copy of the report with the taxpayer who will be given time to review it. The auditor will make any necessary changes to the report before issuing a notice of assessment involving a tax deficiency.

Taxpayer Bill of Rights (PDF)