Under current law, a taxpayer that fails to make a timely payment is required to pay interest after the statutory due date. The interest for such delinquent tax liability is the federal short-term rate, plus four percentage points, compounded daily. In contrast, when the Department of Revenue owes a taxpayer a refund, the rate of interest is the federal short-term rate, plus two percentage points, computed as simple interest. Moreover, the Department of Revenue gets 120 days from the last date for filing the tax return before interest applies. If the refund is mailed within the 120 days, DOR pays no interest. This legislation restores equity to our tax code by subjecting the taxpayer and the Commonwealth to the same interest rate at the federal short-term rate, plus two percentage points, computed as simple interest.