15-31-510. Estimated payments -- interest penalty -- tax returns -- penalty -- interest. (1) For corporations failing to make estimated payments according to the schedule provided in 15-31-502(2), there is assessed a 20% a year underpayment interest penalty calculated as follows:
     (a) The amount of underpayment is the amount of the required installment set forth in 15-31-502 that exceeds the amount, if any, of the installment paid on or before the last date prescribed for payment.
     (b) Notwithstanding the provisions of subsection (1)(a), the interest penalty with respect to an underpayment of any installment may not be imposed if the total amount of all payments of estimated tax made on or before the last date prescribed for the payment of the installment equals or exceeds the amount that would have been required to be paid on or before that date if the estimated tax were an amount equal to 80% of the tax for the taxable year, computed by placing on an annualized basis the taxable income:
     (i) for the first 3 months of the taxable year in the case of the installment required to be paid in the 4th month;
     (ii) for the first 3 months or for the first 5 months of the taxable year in the case of the installment required to be paid in the 6th month;
     (iii) for the first 6 months or for the first 8 months of the taxable year in the case of the installment required to be paid in the 9th month; and
     (iv) for the first 9 months or for the first 11 months of the taxable year in the case of the installment required to be paid in the 12th month of the taxable year.
     (c) For purposes of subsection (1)(b), the taxable income must be placed on an annualized basis by:
     (i) multiplying by 12 the taxable income referred to in subsection (1)(b); and
     (ii) dividing the resulting amount by the number of months in the taxable year (3, 5, 6, 8, 9, or 11, as the case may be) referred to in subsection (1)(b).
     (d) Notwithstanding the provisions of subsections (1)(a) through (1)(c), the interest penalty with respect to an underpayment of any installment may not be imposed if the total amount of all payments of estimated tax made on or before the last date prescribed for the payment of the installment equals or exceeds 80% of the amount determined under subsection (1)(e).
     (e) To determine the amount for any installment:
     (i) take the taxable income for all months during the taxable year preceding the filing month;
     (ii) divide the amount by the base period percentage for all months during the taxable year preceding the filing month;
     (iii) determine the tax on the amount calculated under subsection (1)(e)(ii); and
     (iv) multiply the tax computed under subsection (1)(e)(iii) by the base period percentage for the filing month and all months during the taxable year preceding the filing month.
     (f) For purposes of this subsection (1):
     (i) the base period percentage for any period of months is the average percentage that the taxable income for the corresponding months in each of the 3 preceding taxable years bears to the taxable income of the 3 preceding years;
     (ii) the term "filing month" means the month in which the installment is required to be paid;
     (iii) this subsection (1) applies only if the base period percentage for any 6 consecutive months of the taxable year equals or exceeds 70%; and
     (iv) the department of revenue may by rule provide for the determination of the base period percentage in the case of reorganizations, new corporations, and other similar circumstances.
     (2) If the tax for any corporation is not paid on or before the due date of the return as provided in 15-31-111(2) or if the tax is not paid on or before the due date of the return as provided in 15-31-111(3), there is assessed a penalty of 10% of the amount of the tax due, unless it is shown that the failure was due to reasonable cause and not to neglect.
     (3) If any tax due under this chapter is not paid when due under 15-31-111(2), by reason of extension or otherwise, interest is added to the tax due at the rate of 12% a year from the due date until paid.

     History: En. Sec. 3, Ch. 9, Sp. L. June 1989; amd. Sec. 2, Ch. 92, L. 1993; amd. Sec. 2, Ch. 54, L. 1995.