Penalties and interest apply to any deficient or delinquent payments. A penalty of 5% of the unpaid amount is added for each month (or part of the month) that a payment is delinquent or deficient, up to a maximum of 25%. Interest is computed at the current rate of interest.
The interest rate on all taxes collected or administered by the Department of Revenue is currently 7.25% and is effective until June 30, 2021. For installment payment agreements, the current interest rate is 8.25%.
Previously, from July 1, 2019 through June 30, 2020, the interest rate was 9.5%. The interest rate for installment payment agreements was 12.5%.
References: Tenn. Code Ann. § 67-1-801; Tenn. Code Ann. § 47-14-102(7)