How to Calculate Interest on State Sales Tax Forms
- 1). Contact your state revenue department to find out the interest penalties for your specific state. This information will be available on the agency's website as well. For example, Virginia has a penalty of 6 percent interest per month late, with a maximum penalty of 30 percent.
- 2). Multiply the interest penalty rate by the amount of money you owe. For example, if you owed $100,000 in sales tax and lived where the interest penalty was 5 percent, the interest for one month would be $5,000 (100,000 x 0.05).
- 3). Multiply the amount owed by the number of months late it is. For example, if you owed the $100,000 for three months, you would owe an additional $15,000 (5,000 x 3) in addition to the $100,000. Most states have a cap on how much interest you can be charged. In Virginia, for example, you cannot be charged more than 30 percent interest on the amount you have withheld.