State Revenue Commissioner Bart Graham said today that it cost the state 36 cents to mail each of the 278,000 interest checks that were issued because the state was slow to process and send out income tax refunds this year.
That works out to about $100,000 for a state hurting for cash.
The Department of Revenue has mailed out more than $2 million in interest to taxpayers whose refunds were not issued within 90 days of the April 15 filing deadline. Delays in processing individual income tax returns led to the backlog, which Revenue officials say was caused by $12 million in budget cuts at the agency in the past year. More than 300 Revenue employees were laid off, many of them in the tax return processing unit.
Georgia law requires the state to pay interest on any return not processed within 90 days of April 15, or 90 days from the date the return was filed if after April 15.
The taxpayers receiving interest payments are getting an average of $7.42, although 90,000 are receiving $1 or less. Some were $20 or more. The $2 million total does not include postage and handling costs.
Under state law, the interest accrues at 1 percent per month after the 90-day limit. But the 90-day clock doesn’t begin ticking until April 15, no matter when the taxpayer files a return. Any taxpayer who filed a return on time but did not receive refund before July 14 should receive an interest payment.
After appearing before a Senate budget panel this morning, Graham told reporters that “some” more jobs may be lost in tax return processing if, as expected, he has to continue cutting his budget because of the state’s ongoing fiscal crisis. However, he said his department would do everything possible to avoid being so late on returns that the state has to pay interest again in 2010.