(a) Interest: All taxes imposed and monies withheld or required to be withheld by employers under the provisions of this Chapter and remaining unpaid five (5) days after they become due shall bear interest at the rate of one (1%) per month or fraction thereof, in addition to the amount of the unpaid tax or withholdings.
(b) Penalties: In addition to interest as provided in sub-section A above, penalties for failure to pay taxes and to withhold and remit taxes are imposed as follows based on the tax remaining unpaid after it becomes due:
(1) In the case of a taxpayer's failure to pay taxes due, other than taxes withheld, one and one-half percent (1½%) per month or fraction thereof, or fifty dollars ($50.00), whichever is greater. Except in the case of fraud, the penalty for failure to pay taxes due shall not exceed fifty percent (50%) of the unpaid tax.
(2) In the case of employers who fail to withhold and remit taxes withheld or required to be withheld from employees, three percent (3%) per month or fraction thereof, or fifty dollars ($50.00), whichever is greater. Except in the case of fraud, the penalty for failure to remit taxes withheld or required to be withheld shall not exceed fifty percent (50%) of the unpaid tax.
(3) In the case of a taxpayer's failure to file a return by the due date or by the date resulting from extension, fifty dollars ($50.00).
(4) Where the taxpayer has failed to do any of the following:
A. Failed to file a declaration on which taxpayer has estimated and paid a tax equal to or greater than the tax paid for the previous year; or
B. Where taxpayer has filed a previous return and has failed to file a declaration on which taxpayer has estimated and paid a tax equal to or greater than ninety percent (90%) of the actual tax for the year; or
C. Where taxpayer has failed to file a return and has failed to pay the total tax on or before the end of the month following the end of the taxable year; a penalty is imposed in the amount ten percent (10%) of the difference between ninety percent (90%) of the actual tax for the year and the amount paid prior to the end of the month following the close of the tax year through withholding and declaration.
(5) No penalty or interest shall be charged against a taxpayer for the late payment or nonpayment of estimated tax liability if the taxpayer is an individual who resides in the municipal corporation but was not domiciled there on the first day of January of the current calendar year.
(6) The percentages specified in this Section, when used, shall apply from the first month of delinquency.
(c) Exceptions:
(1) No penalty shall be assessed on additional taxes found on audit to be due when a return was timely filed in good faith and the tax paid within the prescribed time.
(2) In the absence of fraud, neither penalty nor interest shall be assessed on any additional taxes resulting from a federal audit for federal income tax purposes provided an amended return is filed and the additional tax paid within three (3) months after final determination of the federal tax liability.
(3) A taxpayer or employer shall have thirty (30) days after receipt of notice of the imposition of interest and penalties within which to file a written protest or explanation with the Tax Commissioner. If no protest or explanation is filed within the prescribed time, the imposition of interest and penalties shall become and be the final assessment.
(d) Computed penalties of less than five dollars ($5.00) for a first violation shall not be assessed. However, notification to the taxpayer of a first time violation will be made.
(e) Upon recommendation of the Tax Commissioner, the Board of Review may abate penalty or interest, or both, or upon an appeal from the refusal of the Tax Commissioner to recommend abatement of penalty and interest concerning an item of income or expense, the Board may nevertheless abate penalty or interest, or both.
(Ord. 58-2012. Passed 12-6-12.)