How to avoid or pay for penalties and interest
To avoid penalty, you must pay any tax owed by the original quarterly due dates. You must also mail your tax return by the original annual due date, or by the extended due date if a valid extension is attached.
You can pay tax, penalties, and interest using Revenue Online. If you mail your payment and return separately, include FORM-OR-CAT-V, Oregon Corporate Activity Tax Payment Voucher, with your payment.
Penalties may include:
- 5 percent quarterly underpayment penalty (QUP) assessed for failure to pay any quarterly estimated payment as required.
- 5 percent late pay, or failure-to-pay, penalty on tax not paid by the original due date, even if there's a valid extension.
- 20 percent late filing, or failure-to-file, penalty on tax not paid in full by the original due date and the return is filed more than three months after the original or extended due date. This is in addition to the 5 percent quarterly underpayment penalties.
- Additionally, a penalty equal to 25 percent of any calculated deficiency if tax is not paid in full and report is not filed within 30 days of a demand notice being issued by the department.
- 100 percent late payment and late filing penalty if you do not file returns for three consecutive years by the original or extended return filing due date of the third year.
Your penalty total cannot be more than 100 percent of the tax due.
If you do not pay your tax balance by the original filing due date, you must pay interest on your unpaid tax. Interest starts accruing the day after the original due date and ends on the day you pay in full. 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, interest will be charged starting the day after the due date of the original return until the date you pay in full.
If your taxable commercial activity changes because of a federal or state audit that results in more tax, interest will be charged from the due date of the original return until the date you pay in full.
An interest period is each full month, starting with the day after the due date of the original return. Interest is calculated daily for a fraction of a month, based on a 365-day year.
Interest rates may change once a calendar year and are the same for refunds and tax due.
Interest increases by one-third of 1 percent per month, up to 4 percent yearly, on delinquencies if:
- You file a return showing tax due, or we assessed an existing deficiency; and
- The assessment is not paid within 60 days of when the notice of assessment is issued; and
- You do not file a timely appeal.