Press Release - 2009 Interest Rate

October 7, 2008

FOR IMMEDIATE RELEASE

Attention Business Editor

Contact: Bob Rogers, Iowa Department of Revenue, 515.281.5771

IOWA REVENUE DEPARTMENT SETS 2009 INTEREST RATE

DES MOINES - The Iowa Department of Revenue announces that the annual interest rate in 2009 will be 8.0 percent. The monthly interest rate will be 0.7 percent. The new rates are a decrease in the interest rates that were imposed by the Department for tax year 2008, which were 10.0 percent annually and 0.8 percent monthly.

By statute, the Department's interest rate is based on the average prime rate charged by banks on short-term business loans between October 2007 and September 2008. The prime rate fell from October through most of April, which resulted in the Department's interest rate decline for the 2009 calendar year.

The Department charges interest on taxes that are overdue; income, sales and withholding taxes are included. In addition, the Department pays interest to taxpayers who file their income tax returns on time but do not receive their refunds by June 1. Late refunds of other taxes are paid with interest as well.

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