What is South Carolina's tax interest rate for underpayments and overpayments for the period ending December 31, 2015 (per SC IL #15-13)?

Plain-English summary

South Carolina's interest rate on both tax underpayments and overpayments is 3% for the period October 1, 2011 through December 31, 2015. The rate is set under S.C. Code § 12-54-25 and changes periodically as the underlying federal rate moves.

Two mechanical points matter. First, the interest is compounded daily, except that simple interest applies to underpayments of declaration of estimated tax. Second, for fiscal year 2015-2016 (July 1, 2015 through June 30, 2016), budget Provisos 93.7 and 117.87 direct the Department to reduce the interest it pays on eligible refunds by a total of three percentage points from the listed rate. Because the listed rate is 3%, the reduction brings the interest paid on eligible refunds to 0% while that rate is in effect.

The letter also reproduces the Department's full historical interest-rate table going back to 1985, which is useful when computing interest across older periods.

What this means for you

If you owe South Carolina tax

Interest accrues at 3% for the October 1, 2011 - December 31, 2015 period, compounded daily (simple interest for underpaid estimated tax). Interest is separate from any penalties.

If South Carolina owes you a refund

For fiscal year 2015-2016, the interest the state pays on eligible refunds is reduced by three percentage points under budget provisos, which brings refund interest to 0% while the 3% rate is in effect. This reduction is a temporary measure tied to that fiscal year.

Common questions

Q: What is the South Carolina interest rate for this period?
A: 3% on both underpayments and overpayments for October 1, 2011 through December 31, 2015, compounded daily.

Q: Does the 3% rate apply to the interest the state pays me on a refund?
A: No. For fiscal year 2015-2016 the refund-interest rate is reduced by three percentage points to 0% under budget Provisos 93.7 and 117.87.

Q: How is the interest computed?
A: It is compounded daily, except that simple interest applies to underpayments of declaration of estimated tax.

Subject

Interest Rate

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/IL15-13.pdf

Original ruling text

State of South Carolina

Department of Revenue
300A Outlet Pointe Blvd., P.O. Box 125, Columbia, South Carolina 29214
Website Address: http://www.sctax.org
SC INFORMATION LETTER #15-13
SUBJECT:

Interest Rate

DATE:

September 14, 2015

REFERENCE:

S.C. Code Ann. Section 12-54-25 (2014)
House Bill 3701 of 2015, Provisos 93.7 and 117.87
2015 S.C. Act No. 91

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (2014)
SC Revenue Procedure #09-3

SCOPE:

An Information Letter is a written statement issued to the public to announce
general information useful in complying with the laws administered by the
Department. An Information Letter has no precedential value.

The interest rate to be applied to underpayments and overpayments* of taxes is listed below. The
rate is compounded daily except simple interest applies to the underpayment of declaration of
estimated tax.
Period

Rate*

Period

Rate*

9/1/85 – 12/31/85
1/1/86 – 6/30/86
7/1/86 – 9/30/87
10/1/87 – 12/31/87
1/1/88 – 3/31/88
4/1/88 – 9/30/88
10/1/88 – 3/31/89
4/1/89 – 9/30/89
10/1/89 – 3/31/91
4/1/91 – 12/31/91
1/1/92 – 3/31/92
4/1/92 – 9/30/92
10/1/92 – 6/30/94
7/1/94 – 9/30/94
10/1/94 – 3/31/95
4/1/95 – 6/30/95
7/1/95 – 3/31/96
4/1/96 – 6/30/96
7/1/96 – 3/31/98
4/1/98 – 12/31/98
1/1/99 – 3/31/99
4/1/99 – 3/31/00

11%
10%
9%
10%
11%
10%
11%
12%
11%
10%
9%
8%
7%
8%
9%
10%
9%
8%
9%
8%
7%
8%

4/1/00 – 3/31/01
4/1/01 – 6/30/01
7/1/01 – 12/31/01
1/1/02 – 12/31/02
1/1/03 – 9/30/03
10/1/03 – 3/31/04
4/1/04 – 6/30/04
7/1/04 – 9/30/04
10/1/04 – 3/31/05
4/1/05 – 9/30/05
10/1/05 – 6/30/06
7/1/06 – 12/31/07
1/1/08 – 3/31/08
4/1/08 – 6/30/08
7/1/08 – 9/30/08
10/1/08 – 12/31/08
1/1/09 – 3/31/09
4/1/09 – 12/31/10
1/1/11 – 3/31/11
4/1/11 – 9/30/11
10/1/11 – 12/31/15

9%
8%
7%
6%
5%
4%
5%
4%
5%
6%
7%
8%
7%
6%
5%
6%
5%
4%
3%
4%
3%

• Note reduction of interest rate on refunds. For fiscal year 2015-2016 (July 1, 2015
  through June 30, 2016), Budget Provisos 93.7 and 117.87 direct the Department to reduce
  the rate of interest paid on eligible refunds by a total of three percentage points from the
  above listed rates. House Bill 3701 of 2015 (Act No. 91), Sections 93 and 117.