Friday, November 1, 2013

Tax Question

I know I'm behind on posting, and I'll get back on it ASAP.

Important personal question I want to put out to the masses. I filed my taxes on October 15th, but failed to send in the check. I realized it pretty quick and remedied that, but they slapped with interest that amounted to 30% and 36% annualized, on the balance. I think they're going to give me a pass at the end of the day, but my question is... How can the state Department of Revenue charge a 36% interest rate when the same state's Statutory Maximum Interest Rate under their usury statute is 16%?

Surely someone has brought this up before, and I don't have a lot of experience being late on my taxes, so what's the catch?

UPDATE: The IRS does this as well, apparently. The interest rate for filing late is 5% per month, or  79.6% annualized. This seems like it would violate every states' usury law, and is extremely harsh. I'm sure it normally gets negotiated, by is it legal?


crabsofsteel said...

Your state must be ignoring their usury rate of 16% since credit card companies routinely charge 25% on unpaid balances.

As for the Feds, anything they charge supercedes state law.

Concrete Jungle said...

Fair points, but the credit cards get out of local usury laws because the Supreme Court deemed that they only apply to in-state companies (and all the credit cards are based in South Dakota where no one lives except for credit card company employees). This is a state charging a seemingly illegal rate to its own citizens.

I think you're correct on the federales - they get to do whatever they want regardless of laws.

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