The Kentucky Department of Revenue has set the 2014 tax interest rate, which remains unchanged from the previous two years. The interest rate is four percent; the rate charged by the Department on unpaid taxes is six percent; and for interest due on a refund, the rate is two percent.
Each year the Department of Revenue, pursuant to KRS 131.183, is required to review the annual tax rate and change or keep the same rate. The new interest rate is based on the adjusted prime rate charged by Kentucky banks during the month of October.
A recent survey of Kentucky banks revealed that the average prime interest rate was four percent during the month of October 2013. The interest rate is effective Jan. 1, 2014.