Jan 182017
One may chuckle at the fact that the word “interest” is used 135 times in different parts of the Tax Code but is never defined. “Interest” as used in the Tax Code refers to:
• Income earned from “deposits,” “deposit substitutes,” “trust funds” and other similar arrangements
• Income generated from loans, bonds, notes, and other forms of borrowings
• The additional imposition whenever a taxpayer belatedly pays a tax
• Revenue received from lending activities by bank, non-bank financial intermediaries and finance companies which is subject to the gross receipts tax (GRT) of 1% to 5% depending on the remaining maturity of the underlying debt instrument, and which is subject to readjustment of tax rates under certain conditions.