The University of Tennessee, Knoxville

Tennessee County Municipal Advisory Service

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Interest Rate on Delinquent Taxes

Reference Number: MTAS-748
Tennessee Code Annotated
Reviewed Date: October 15, 2015
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The payment of taxes to local municipalities or to the state of Tennessee generally has a due date associated with it. If a taxpayer fails to pay the tax, or a portion thereof, on or before the date the taxes are required to be paid, interest is added to the amount of tax due. The commissioner of revenue determines the interest rate for delinquent taxes collected or administered by the state of Tennessee. Sales tax and local business tax are examples of taxes falling into this category.

Formula Rate of Interest
T.C.A. § 67-1-801 provides for the rate of interest to be charged on delinquent tax payments. This rate is called the “formula rate of interest” and is determined and set annually by the Tennessee commissioner of revenue.

Action Required by Municipal Finance Staff
Finance directors, city recorders and other finance office personnel responsible for collecting or remitting delinquent taxes collected or administered by the state of Tennessee should review the interest rate currently used for delinquent accounts and verify that it complies with the chart below.

Historical Interest Rates
The following table from the Tennessee Department of Revenue is a historical presentation of the “formula rate of interest” as determined by the commissioner of revenue. This information is provided as supplemental data to give finance officials a perspective of interest rates for prior years.

INTEREST RATE HISTORY
DELINQUENT TAXES OF ALL TYPES
T.C.A. § 67-1-801(a)(1-3)
PERIOD COVERED
RATE
PERIOD COVERED
RATE
Through
-
9/30/1974
6.00%
7/1/1996
-
6/30/1997
12.25%
10/1/1974
-
7/31/1980
8.00%
7/1/1997
-
6/30/1998
12.50%
8/1/1980
-
6/30/1983
10.00%
7/1/1998
-
6/30/1999
12.50%
7/1/1983
-
6/30/1984
14.50%
7/1/1999
-
6/30/2000
11.75%
7/1/1984
-
6/30/1985
16.00%
7/1/2000
-
6/30/2001
13.50%
7/1/1985
-
6/30/1986
14.50%
7/1/2001
-
6/30/2002
11.00%
7/1/1986
-
6/30/1987
14.50%
7/1/2002
-
6/30/2003
8.75%
7/1/1987
-
6/30/1988
12.25%
7/1/2003
-
6/30/2004
8.25%
7/1/1988
-
6/30/1989
13.00%
7/1/2004
-
6/30/2005
8.00%
7/1/1989
-
6/30/1990
15.50%
7/1/2005
-
6/30/2006
10.00%
7/1/1990
-
6/30/1991
14.00%
7/1/2006
-
6/30/2007
12.00%
7/1/1991
-
6/30/1992
12.50%
7/1/2007
-
6/30/2008 12.25%
7/1/1992
-
6/30/1993
10.50%
7/1/2008
-
6/30/2009
9.00%
7/1/1993
-
6/30/1994
10.00%
7/1/2009
-
6/30/2015
7.25%
7/1/1994
-
6/30/1995
11.25%
 
7/1/1995
-
6/30/1996
13.00%
 
 

 

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