(a) Where a tax payment is required to be made by electronic funds transfer, any payment made by other than electronic funds transfer shall be treated as a tax payment not made in a timely manner, and shall be subject to penalty and interest in accordance with the applicable provisions of the general statutes, except that (1) for the first imposition of a penalty under this section relating to a tax period beginning on or after January 1, 2012, the penalty shall be equal to ten per cent of the tax payment required to be made by electronic funds transfer or two thousand five hundred dollars, whichever is less; (2) for the second imposition of a penalty under this section relating to a tax period beginning on or after January 1, 2012, the penalty shall be equal to ten per cent of the tax payment required to be made by electronic funds transfer or ten thousand dollars, whichever is less; and (3) for the third or any subsequent imposition of a penalty under this section relating to a tax period beginning on or after January 1, 2012, the penalty shall be equal to ten per cent of the tax payment required to be made by electronic funds transfer.
(b) Where any tax payment is required to be made by electronic funds transfer, such payment shall be treated as a tax payment not made in a timely manner if the electronic funds transfer for the amount of the tax payment is not initiated on or before the due date thereof. (1) For periods ending prior to December 31, 2019, any tax payment treated under this subsection as a tax payment not made in a timely manner shall be subject to interest in accordance with the applicable provisions of the general statutes, and a penalty that shall be equal to two per cent of the tax payment required to be made by electronic funds transfer, if such failure to pay by electronic funds transfer is for not more than five days, five per cent of the tax payment required to be made by electronic funds transfer, if such failure to pay by electronic funds transfer is for more than five days but not more than fifteen days, and ten per cent of the tax payment required to be made by electronic funds transfer, if such failure to pay by electronic funds transfer is for more than fifteen days; and (2) for periods ending on and after December 31, 2019, any tax payment treated under this subsection as a tax payment not made in a timely manner shall be subject to interest and penalty in accordance with the applicable provisions of the general statutes.
(May Sp. Sess. P.A. 92-17, S. 37, 59; P.A. 94-6, S. 3, 4; 94-175, S. 21, 32; May Sp. Sess. P.A. 94-4, S. 80, 85; P.A. 95-160, S. 64, 69; P.A. 98-244, S. 27, 35; P.A. 11-61, S. 65; P.A. 19-186, S. 29.)
History: May Sp. Sess. P.A. 92-17, S. 37 effective June 19, 1992, and applicable to any tax payments or estimated tax payments due on or after January 1, 1993; P.A. 94-6 amended Subsecs. (a) and (b) to allow employers an additional day to pay over withholding taxes to the department, effective April 7, 1994, and applicable to payments required to be made on or after said date; P.A. 94-175 made technical change in Subsecs. (a) and (b), effective June 2, 1994; May Sp. Sess. P.A. 94-4 revised effective date of P.A. 94-175 but without affecting this section; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; P.A. 98-244 modified timely payment with respect to Saturdays, Sundays and holidays, and payments over by an employer and replaced flat 10% penalty with 2%, 5% and 10% rates tied to the period of lateness, effective June 8, 1998, and applicable to payments first due and payable on and after October 1, 1998; P.A. 11-61 deleted former Subsec. (a) re time to initiate electronic funds transfer, redesignated existing Subsec. (b)(1) as Subsec. (a) and amended same to delete language re failure to timely transfer funds and add new Subdivs. (1) to (3) re increasing penalties for repeated failure to make timely payments, and redesignated existing Subsec. (b)(2) as Subsec. (b) and amended same to revise provision re requirement for timely payment and impose interest on the penalty, effective June 21, 2011, and applicable to tax periods commencing on or after January 1, 2012; P.A. 19-186 amended Subsec. (b) to designate existing provision re interest in accordance with applicable provisions of general statutes and penalty of 2 per cent as Subdiv. (1) and amended same to add “For periods ending prior to December 31, 2019”, add Subdiv. (2) re interest and penalty in accordance with applicable provisions of general statutes for periods ending on and after December 31, 2019, and make technical changes, effective July 8, 2019.