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By Oct. 15 of each year, the Ohio Tax Commissioner certifies the interest rates that will apply to overdue taxes during the next calendar year. For most taxes, the interest rate is calculated by adding three percentage points to the federal short-term rate (rounded to the nearest percentage point) that was in effect during July of the current year.
Based on this formula, the Tax Commissioner has certified that the interest rate that will apply to most overdue taxes during 2010 will be 4 percent. A table of interest rates that apply to previous years may be found below.
Since July 1, 2005, a different rate of interest has applied to overdue estate taxes and tangible personal property taxes. This rate is calculated by simply rounding the federal short term rate to the nearest percentage point. Accordingly, the 2010 interest rate on overdue tangible personal property and estate taxes will be 1 percent. See Table 2 for the rate in effect in previous years.
An example of how to calculate interest using these tables is also listed below, as well as copies of recent journal entries certifiing these rates.
Table 1 - Certified interest rates for most taxes |
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Calendar |
Annual |
Monthly |
| 2010* | 4.0% | 0.33% |
| 2009* | 5.0% | 0.42% |
| 2008* | 8.0% | 0.67% |
| 2007* | 8.0% | 0.67% |
| 2006* | 6.0% | 0.50% |
| 2005* | 5.0% | 0.42% |
| 2004 | 4.0% | 0.33% |
| 2003 | 6.0% | 0.50% |
| 2002 | 7.0% | 0.58% |
| 2001 | 9.0% | 0.75% |
| 2000 | 8.0% | 0.67% |
| 1999 | 8.0% | 0.67% |
| 1998 | 9.0% | 0.75% |
| 1997 | 9.0% | 0.75% |
| 1996 | 9.0% | 0.75% |
| 1995 | 9.0% | 0.75% |
| 1994 | 7.0% | 0.58% |
| 1993 | 7.0% | 0.58% |
| 1992 | 10.0% | 0.83% |
| 1991 | 11.0% | 0.92% |
| 1990 | 11.0% | 0.92% |
| 1989 | 11.0% | 0.92% |
| 1988 | 10.0% | 0.83% |
| 1987 | 6.0% | 0.50% |
| 1986 | 8.0% | 0.67% |
| 1985 | 9.0% | 0.75% |
| 1984 | 9.0% | 0.75% |
| 1983 | 10.0% | 0.83% |
*See Table 2 for estate tax and tangible personal property tax interest rates. |
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Table 2: Interest rate for estate tax and tangible personal property tax |
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|
Annual |
Monthly |
| Calendar Year 2010 | 1.0% | 0.08% |
| Calendar Year 2009 | 2.0% | 0.17% |
| Calendar Year 2008 | 5.0% | 0.42% |
| Calendar Year 2007 | 5.0% | 0.42% |
| Calendar Year 2006 | 3.0% | 0.25% |
| July - December 2005 | 2.0% | 0.17% |
| January - June 2005 | 5.0% | 0.42% |
Journal Entries:
- Interest Rate Certification for Calendar Year 2010 (PDF)
- Interest Rate Certification for Calendar Year 2009 (PDF)
- Interest Rate Certification for Calendar Year 2008 (PDF)
- Interest Rate Certification for Calendar Year 2007 (PDF)
- Interest Rate Certification for Calendar Year 2006 (PDF)
- Interest Rate Certification for Calendar Year 2005 (PDF)
- Interest Rate Certification for Calendar Year 2004 (PDF)
Interest Rate Formula |
Tax due x interest rate x number of days late ÷ number of days in year = Interest |
Example: 2007 IT-1040 filed June 21, 2009 with a tax due of $60.00 (return was due April 15, 2008) |
$60.00 x 8% x 260 days ÷ 366 = $3.41 |
$60.00 x 5% x 172 days ÷ 365 = $1.41 |
Total Interest = $4.82 |
