(a) For purposes of this Section:
(1) "Federal short-term rate" means the rate of the average market yield on outstanding marketable obligations of the United States with remaining periods to maturity of three years or less, as determined under section 1274 of the Internal Revenue Code, for July of the current year.
(2) "Applicable Interest Rate" means the federal short-term rate, rounded to the nearest whole number per cent, plus five per cent. The rate shall apply for the calendar year next following the July of the year in which the federal short-term rate is determined. By the thirty-first day of October of each year the Income Tax Clerk shall publish the Applicable Interest Rate applicable to the next succeeding calendar year.
(b) Whenever a taxpayer, employer, any agent of the employer, or any other payer for any reason fails, in whole or in part, to make to the Village timely and full payment or remittance of income tax, estimated income tax, or withholding tax or to file timely with the Village any return required to be filed, the interest amounts and penalties prescribed in this Section shall be paid, as follows:
(1) Interest shall be imposed at the Applicable Interest Rate, per annum, on all unpaid income tax, unpaid estimated income tax, and unpaid withholding tax.
(2) (A) With respect to unpaid income tax and unpaid estimated income tax, a penalty equal to fifteen per cent of the amount not timely paid shall be paid.
(B) With respect to any unpaid withholding tax, a penalty equal to fifty per cent of the amount not timely paid shall be paid.
(C) (a) For tax years ending on or before December 31, 2022, with respect to returns other than estimated income tax returns, a penalty of twenty-five dollars for each failure to timely file each return, regardless of the liability shown thereon for each month, or any fraction thereof, during which the return remains unfiled regardless of the liability shown thereon shall be paid. This penalty shall not exceed one hundred fifty dollars for each failure.
(b) For the tax years ending on or after January 1, 2023, with respect to returns other than estimated income tax returns, the Village may impose a penalty not exceeding $25 for each failure to timely file each return, regardless of the liability shown thereon, except that the Village shall abate or refund the penalty assessed on a taxpayer’s first failure to timely file a return after the taxpayer files that return.
(3) In addition to any interest and penalties, all of the Village's post-judgment collection costs and fees, including attorney's fees shall be paid by the taxpayer, employer, any agent of the employer, or any other payer.
Notwithstanding the foregoing paragraphs, no penalty, interest, or other assessment will be made for the late payment or nonpayment of estimated tax liability in either of the following circumstances: the taxpayer is an individual who lives in the Village but was not domiciled in the Village on January 1 of the current calendar year; or the taxpayer has remitted through estimated tax payments or otherwise a total amount which is at least equal to one hundred percent (100%) of the taxpayer's tax liability for the preceding year as shown on the return filed by the taxpayer for that preceding year, provided that the return for the preceding year reflected a twelve month period and the taxpayer filed a return for the preceding year.
(c) The Income Tax Clerk shall have the authority to abate or partially abate penalties or interest imposed under this section when the tax administrator determines, in the Income Tax Clerk's sole discretion, that such abatement is appropriate.
(Ord. 2023-22. Passed 11-13-23.)