Penalties and interest for late or wrong tax filings

A. Penalties and interest must be added to and become a part of the tax, when: 1. Failure to file tax return. In case of failure to file any tax return required to be filed on the date required (determined with regard to any extension of time for filing), unless it is shown that the failure is due to reasonable cause and not due to neglect, there will be added to the amount required to be shown as tax on the return five percent of the amount of the tax if the failure is for not more than one month, with an additional five percent for each additional month or fraction thereof during which the failure continues, not exceeding twenty-five percent in the aggregate. For purposes of this paragraph, penalties may not exceed the maximum amount allowed under the revised charter of the County of Maui (1983) as amended. For purposes of this paragraph, the amount of tax required to be shown on the return will be reduced by the amount of any part of the tax paid on or before the date prescribed for payment of the tax and by the amount of any credit against the tax which may be claimed upon the return. 2. Failure to pay tax. a. If any part of any underpayment is due to negligence or intentional disregard but without intent to defraud, there must be added to the tax an amount up to twenty-five percent of the underpayment as determined by the director, or the maximum amount allowed under the revised charter of the County of Maui (1983), as amended, whichever is the lesser. b. If any part of any underpayment of tax required to be shown on a return is due to fraud, there must be added to the tax an amount up to fifty percent of the underpayment as determined by the director, or the maximum amount allowed under the revised charter of the County of Maui (1983), as amended, whichever is the lesser. 3. Interest on underpayment or nonpayment of tax. a. If any amount of tax is not paid on or before the last date prescribed for payment, interest on such amount at the rate of two-thirds of one percent a month or fraction of a month must be paid for the period beginning with the first calendar day after the date prescribed for payment. b. Interest prescribed under this paragraph on any tax must be paid upon notice and demand, and must be assessed, collected, and paid in the same manner as taxes. c. No interest under this paragraph can be imposed on interest provided by this paragraph. d. If any portion of a tax is satisfied by credit of any overpayment, then no interest must be imposed under this paragraph on the portion of the tax so satisfied for any period during which, if the credit had not been made, interest would have been allowable with respect to the overpayment. B. No taxpayer is exempt from any penalty or interest by reason of having contested the tax, except to the extent the tax is adjudged to be excessive or contrary to law. ( Ord. No. 5273 , § 2, 2021)