This bill amends existing tax law in New Jersey to increase the interest rate paid on overdue refunds of tax overpayments. Specifically, for tax payments related to reports or returns due on or after July 1, 2026, the interest rate on overpayments will be set at three percentage points above the prime rate, as determined by the director, compounded annually. This change aims to align the interest rate on tax refunds with the higher interest rate applied to tax deficiencies, which currently accrues at three percentage points above the prime rate. The bill also clarifies that interest on overpayments will not be paid on amounts less than $1.00 or on refunds issued within six months of the filing deadline.

Additionally, the bill grants the Director of the Division of Taxation the authority to adopt regulations immediately to implement these changes, with a temporary effective period of up to 180 days following enactment. This regulatory authority is intended to facilitate a smooth transition to the new interest rate structure. Overall, the bill seeks to create equity in the state's tax system by ensuring that the interest rates for tax refunds and deficiencies are consistent.

Statutes affected:
Introduced: 54:49-15.1