Section 4-7.2-9. Levy of penalties and interest; waiver of penalties.
A. Levy of penalties. A penalty of ten percent of the tax may be imposed upon the failure to file an application or the failure to pay the tax by the due date established by Section 4-7.2-7. Only the late filing penalty shall be imposed by the Director if both the application and payment are late; however, both penalties may be assessed if the Director determines that the taxpayer has a history of noncompliance. In the case of an assessment of additional tax made by the Director, if the application and, if applicable, the return were made in good faith and the understatement of the tax was not due to any fraud, reckless or intentional disregard of the law by the taxpayer, there shall be no late payment penalty assessed with the additional tax. If any assessment of tax by the Director is not paid within thirty days, the Director may impose a ten percent late payment penalty. If the failure to file or pay was not the fault of the taxpayer, the penalties shall not be imposed, or if imposed, shall be abated by the Director. In order to demonstrate lack of fault, the taxpayer must show that he acted responsibly and that the failure was due to events beyond his control.
(1) "Acted responsibly" means that: (i) the taxpayer exercised the level of reasonable care that a prudent person would exercise under the circumstances in determining the filing obligations for the business and (ii) the taxpayer undertook significant steps to avoid or mitigate the failure, such as requesting appropriate extensions (where applicable), attempting to prevent a foreseeable impediment, acting to remove an impediment once it occurred, and promptly rectifying a failure once the impediment was removed or the failure discovered.
(2) "Events beyond the taxpayer's control" include, but are not limited to, the unavailability of records due to fire or other casualty; the unavoidable absence (e.g., due to death or serious illness) of the person with the sole responsibility for tax compliance; or the taxpayer's reasonable reliance in good faith upon erroneous written information from the Director who was aware of the relevant facts relating to the taxpayer's business when he provided the erroneous information.
(3) In no case will the penalty for failure to file a license application by the date established in Section 4-7.2-3 of this Article, nor the penalty for failure to pay the tax by the date established in Section 4-7.2-7 of this Article exceed the amount of the tax due.
(4) A penalty of ten percent shall be imposed upon any underpayment of the taxes assessable by this Article.
B. Levy of interest. Interest shall be charged on the late payment of the tax, or any portion thereof, from the due date until the date paid without regard to fault or other reason for the late payment.
(1) Interest will accrue on the sum of the unpaid tax and penalty at the applicable interest rate specified in Section 4-20-3. Interest will be computed from the first day following the day on which the tax was payable.
(2) No interest shall accrue on an adjustment of
estimated tax liability to actual liability at the conclusion of a base
year. No interest shall be charged on a late payment, provided the late
payment is made not more than thirty days from the due date of the tax.
C. Waiver of penalties. The Director may waive any penalty for the failure to file a license application in accordance with Section 4-7.2-3 if such failure was not the fault of the taxpayer. The Director may waive any penalty for failure to pay a license tax or fee in accordance with Section 4-7.2-7 if such failure was not the fault of the taxpayer.