Interest may be paid on delayed state tax refunds
Hawaii residents may be paid interest if their state income tax refunds are delayed too long.
The House unanimously passed a bill today requiring the state to pay monthly interest at a rate of one-third of 1 percent of the refund amount if a tax overpayment isn't refunded within 90 days. It had previously passed the Senate.
The measure is in response to a move by Gov. Linda Lingle to delay payment of this year's refunds until July, when the next fiscal year begins, so that the state can save $275 million on paper.
The state budget passed by the Legislature on Tuesday perpetuates the delay of income tax refunds next year as well.
Interest payments would begin 90 days after tax returns are filed or 90 days after April 20, whichever is later.
The bill is HB1948.