15-31-510. Estimated payments -- tax returns -- penalty and interest. (1) A corporation that fails to make estimated payments according to the schedule provided in 15-31-502(2) is assessed interest as provided in 15-1-216 calculated as follows:

(a) The amount of underpayment is the amount of the required installment set forth in 15-31-502 that exceeds the amount, if any, of the installment paid on or before the last date prescribed for payment.

(b) Notwithstanding the provisions of subsection (1)(a), interest with respect to an underpayment of any installment may not be charged if the total amount of all payments of estimated tax made on or before the last date prescribed for the payment of the installment equals or exceeds the amount that would have been required to be paid on or before that date if the estimated tax were an amount equal to 80% of the tax for the tax year, computed by placing on an annualized basis the taxable income:

(i) for the first 3 months of the tax year in the case of the installment required to be paid in the 4th month;

(ii) for the first 3 months or for the first 5 months of the tax year in the case of the installment required to be paid in the 6th month;

(iii) for the first 6 months or for the first 8 months of the tax year in the case of the installment required to be paid in the 9th month; and

(iv) for the first 9 months or for the first 11 months of the tax year in the case of the installment required to be paid in the 12th month of the tax year.

(c) For purposes of subsection (1)(b), the taxable income must be placed on an annualized basis by:

(i) multiplying by 12 the taxable income referred to in subsection (1)(b); and

(ii) dividing the resulting amount by the number of months in the tax year (3, 5, 6, 8, 9, or 11, as the case may be) referred to in subsection (1)(b).

(d) Notwithstanding the provisions of subsections (1)(a) through (1)(c), interest with respect to an underpayment of any installment may not be charged if the total amount of all payments of estimated tax made on or before the last date prescribed for the payment of the installment equals or exceeds 80% of the amount determined under subsection (1)(e).

(e) To determine the amount for any installment:

(i) take the taxable income for all months during the tax year preceding the filing month;

(ii) divide the amount by the base period percentage for all months during the tax year preceding the filing month;

(iii) determine the tax on the amount calculated under subsection (1)(e)(ii); and

(iv) multiply the tax computed under subsection (1)(e)(iii) by the base period percentage for the filing month and all months during the tax year preceding the filing month.

(f) For purposes of this subsection (1):

(i) the base period percentage for any period of months is the average percentage that the taxable income for the corresponding months in each of the 3 preceding tax years bears to the taxable income of the 3 preceding years;

(ii) the term "filing month" means the month in which the installment is required to be paid;

(iii) this subsection (1) applies only if the base period percentage for any 6 consecutive months of the tax year equals or exceeds 70%; and

(iv) the department may by rule provide for the determination of the base period percentage in the case of reorganizations, new corporations, and other similar circumstances.

(2) In addition to the interest assessed in subsection (1), if any tax due under this chapter is not paid when due as provided in 15-31-111, by reason of extension or otherwise, penalty and interest are added to the tax due as provided in 15-1-216.

History: En. Sec. 3, Ch. 9, Sp. L. June 1989; amd. Sec. 2, Ch. 92, L. 1993; amd. Sec. 2, Ch. 54, L. 1995; amd. Sec. 4, Ch. 51, L. 1997; amd. Sec. 12, Ch. 427, L. 1999; amd. Sec. 15, Ch. 594, L. 2005.