N.C. to pay interest on tardy tax refunds
Posted May 28, 2010 3:04 p.m. EDT
Raleigh, N.C. — The state Department of Revenue will owe about 312,000 North Carolina taxpayers interest on their tax refunds because they won't be processed by the end of the month, officials said Friday.
The Revenue Department has already issued more than 2.4 million refunds, totaling more than $1.75 billion. Officials said about 99 percent of taxpayers who filed their 2009 taxes electronically have received their refunds, and 79 percent of taxpayers who filed paper returns have received their refunds.
The returns that were filed by April that still need to be processed total about $222 million in refunds owed by the state, officials said. Because the refunds won't meet the May 31 deadline set by state law, the state will begin paying interest on them at a 5 percent annual rate.
“We will continue to monitor refunds very closely and send them out each week as cash flow allows,” Revenue Secretary Ken Lay said in a statement. “Everyone who is due a refund will receive a refund as quickly as possible.”
Officials said North Carolina is among several states that have had to delay issuing tax refunds this year because of the recession’s effect on tax collections and cash flow. Others include Alabama, Kansas, Iowa, Hawaii and Rhode Island.
Last year, all refunds were issued by May 13.