Sec. 78.5. Interest on underpayments

Tax Law, §§ 171, 481(1)(a)(ii), 1096

(a) If any amount of tax is not paid on or before the date prescribed for payment, interest on the amount not paid is due for the period from such prescribed date to the date on which the tax is paid, whether or not any extension of time for payment was granted. Interest, or any other amount determined by reference to such interest, is compounded daily.

(b) The underpayment rate of interest is set by the Commissioner of Taxation and Finance pursuant to the provisions of subdivision twenty-sixth of section 171 of the Tax Law. Such rate will apply to the tax or any portion thereof that remains or becomes due on or after the date on which such rate becomes effective and applies only for the period during which such rate is in effect. For information regarding the underpayment rate of interest, see Part 2393 of this Title.

(c) Interest is determined, assessed, collected and paid in the same manner as the taxes imposed by article 20 of the Tax Law. Provided however, interest shall not be paid by the use of stamps. Interest is not due if the amount thereof is less than one dollar.