|To avoid penalty and interest, you must mail any tax payment owed and your tax return or extension request by the original due date of the tax return.
Use Form 20-V (Oregon Corporation tax payment voucher) to mail tax, penalties, and interest payments if mailed separate from your tax return.
Common penalties include:
5 percent late pay (failure-to-pay) penalty:
You'll owe a 5 percent late-pay penalty on any tax not paid by the original return filing due date, even if there's a valid extension. More time to file doesn't mean more time to pay.
20 percent late filing (failure-to-file) penalty:
Exception: If you have an extension, the late payment penalty will not be charged if you:
Pay at least 90 percent of the tax due on or before the original due date of the return; and
Pay the balance of the tax when you file within the extension period; and
Pay any interest due either when the return is filed or within 30 days from our billing notice.
You'll owe a 20 percent late filing penalty if you don't pay tax in full on or before the original filing due date and file more than three months after the original or extended due date.
The 20 percent late filing penalty is in addition to the 5 percent failure-to-pay penalty.
100 percent late pay and late filing penalty on taxes if you:
Do not file returns for three consecutive years by the original or extended return filing due date of the third year. 100 percent penalty is assessed on each year's tax balance.
Less common penalties:
20 percent substantial understatement of income penalty:
Post amnesty penalty:
If we determine that you have substantially understated your income on your return, you must pay a substantial understatement penalty. A substantial understatement of income is more than $25,000 for C corporations and $15,000 for all others. Substantially understated income includes income attributable to an abusive tax shelter, even if fully disclosed. This penalty is in addition to all other penalties provided by law.
If we determine that you were eligible for the 2009 tax amnesty program and you didn't participate, you must pay an additional 25 percent penalty. This penalty is in addition to all other penalties provided by law and applies to tax years 2007 and before.
The total of most penalties cannot be more than 100 percent of the tax due. Exceptions: Penalties for substantial understatement of income and post amnesty may be in addition to other penalties.
You must pay interest on unpaid taxes if you don't pay the tax balance by the original filing due date.
An interest period is each full month, starting with the day after the due date of the original return. For example, April 16 through May 15 is one full interest period.
Interest is figured daily for a fraction of a month, based on a 365-day year.
Interest owed on tax starts the day after the due date of your original return and ends on the date of your payment.
Even if you get an extension to file, you still owe interest if you pay after the return’s original due date.
If you file an amended return and have tax to pay, we will charge interest starting the day after the due date of the original return until the date you pay in full.
If your taxable income is changed because of a federal or state audit and you owe more tax, we will charge interest from the due date of the original return to the date you pay in full.
- Interest rates may change once a calendar year.
To calculate interest:
Tax × annual interest rate × number of full years.
Tax × monthly interest rate × number of months.
Tax × daily interest rate × number of days.
Interest rates and effective dates are the same for refunds and tax due:
| For periods
|January 1, 2013
| January 1, 2012
| January 1, 2011
| January 1, 2010
Interest accrues on any unpaid tax during an extension of time to file.
Interest will increase by one-third of 1 percent per month (4 percent yearly) on delinquencies if:
You file a return showing tax due, or the Department of Revenue has assessed an existing deficiency; and
The assessment is not paid within 60 days after the notice of assessment is issued; and
You have not filed a timely appeal.