(a) The provisions contained herein shall govern the application of the Failure to Timely Pay penalty to all taxes administered by the department, except for:
1. Penalties relating to registration and titling of motor vehicles; and2. Penalties related to ad valorem taxes on real or personal property. Notwithstanding the preceding sentence, ad valorem taxes related to the property of public utilities are included within the scope of this regulation.
(b) This penalty shall be applied to the net tax liability (tax amount shown due on a return less any payments or credits) that remains unpaid after the due date prescribed for the payment of the tax.
(c) This penalty shall also be applied to tax due in a "Notice and Demand" notification sent to a taxpayer.
(2) DEFINITIONS. (a) Return. Any form or return that is defined in Sections 40-1-1(2) , 40-1-1(14) and 40-2A-3(19) .(b) Notice and Demand. Written notification to a taxpayer of unpaid taxes stating the amount of tax due, the type of tax, the period for which tax is due, and demanding the payment thereof.
(3) PENALTY PROVISIONS. The Failure to Timely Pay Penalty shall be calculated on annual returns differently from monthly or quarterly returns, as follows:
(a) Annual Returns.1. In the event a taxpayer fails to pay the tax shown as due on an annual return on or before the due date prescribed for the payment of the tax, a penalty of 1 percent of the tax per month or 1 percent of the tax for each fraction of a month thereof, shall be added. However, this penalty shall not exceed 25 percent of the tax. For example, where a taxpayer timely files an income tax return due on April 15, but fails to pay the amount shown as due on the return until September 30, a nonpayment penalty of 6 percent plus interest applies.
2. In the event a taxpayer fails to pay any amount of tax required to be shown on an annual return within 30 calendar days from the date of the first notice and demand, as defined in paragraph (2)(b), a penalty of 1 percent of the amount of tax due per month or 1 percent of the tax for each fraction of a month thereof, shall be added. However, this penalty shall not exceed 2 5 percent of the tax. For example, where a taxpayer receives a notice and demand on June 1, for tax which was required to be shown on a return, but was not so shown, a penalty of 4 percent of the unpaid tax plus interest will be added if the tax remains unpaid until October 16.
(b) Taxes for which Monthly or Quarterly Returns are Required.1. In the event the taxpayer fails to pay the tax shown due on a monthly or quarterly return on or before the due date prescribed for the payment of the tax, a penalty of 10 percent of the amount of the tax not paid on or before the due date shall be added. For any tax for which no return is required until an event triggers a liability, there shall be a penalty of 10 percent of the tax not paid on or before the due date.
2. In the event the taxpayer fails to pay any amount of tax required to be shown on a monthly or quarterly return, or any amount of tax for which no return is required, within 30 calendar days from the date of the first notice and demand, a penalty of 10 percent of the unpaid tax stated in the notice and demand shall be added.