Title 32 V.S.A. § 3108 (Establishment of interest rates) as most recently amended by Act 175 (2020) requires the Commissioner to set rates no later than December 15th for the calculation of interest on underpayment and overpayment of tax liabilities for the upcoming calendar year.
The average prime loan rate charged by banks (as determined by the Board of Governors of the Federal Reserve System) for the 12-month period beginning October 1, 2019 and ending September 30, 2020 was 3.94%. Rounding up to the nearest quarter of a percent, the annual rate for overpayment of tax is 4.0%. Similarly, the annual interest rate for underpayment of tax will be 4.0%.
Current Interest Rates
| Year | Overpayment Annual Rate | Underpayment Annual Rate |
|---|---|---|
| 2021 | 4.0% | 4.0% |
Interest Rates (1981-2020)
| Year | Annual Rate | Overpayment Annual Rate | Underpayment Annual Rate | Memo |
|---|---|---|---|---|
| 2020 | 5.5% | 7.5% | 2020 Interest Rates Memo | |
| 2019 | 4.75% | 6.75% | 2019 Interest Rates Memo | |
| 2018 | 4.0% | 6.0% | 2018 Interest Rates Memo | |
| 2017 | 3.6% | 5.6% | 2017 Interest Rates Memo | |
| 2016 | 3.6% | 5.6% | 2016 Interest Rates Memo | |
| 2015 | 3.6% | 5.6% | ||
| 2014 | 3.6% | 5.6% | ||
| 2013 | 3.6% | 5.6% | ||
| 2012 | 4.8% | |||
| 2011 | 4.8% | |||
| 2010 | 4.8% | |||
| 2009 | 6.0% | |||
| 2008 | 9.6% | |||
| 2007 | 8.4% | |||
| 2006 | 6.0% | |||
| 2005 | 6.0% | |||
| 2004 | 6.0% | |||
| 2003 | 6.0% | |||
| 2002 | 8.4% | |||
| 2001 | 9.6% | |||
| 2000 | 8.4% | |||
| 1999 | 9.6% | |||
| 1998 | 9.6% | |||
| 1997 | 9.6% | |||
| 1996 | 9.6% | |||
| 1995 | 7.2% | |||
| 1994 | 6.0% | |||
| 1993 | 7.2% | |||
| 1992 | 9.6% | |||
| 1991 | 12.0% | |||
| 1990 | 12.0% | |||
| 1989 | 10.8% | |||
| 1988 | 9.6% | |||
| 1987 | 9.6% | |||
| 1986 | 12.0% | |||
| 1985 | 13.2% | |||
| 1984 | 12.0% | |||
| 1983 | 15.6% | |||
| 1982 | 12.0% | |||
| Prior Years* | 12.0% |
*Interest rates for 1981 and prior set by statute