For the period of October 1, 2023 through December 31, 2023, Virginia’s interest rates for the underpayment or overpayment of tax will increase to 10%. This is an increase from the 9% interest rates imposed on tax underpayments or overpayments from January 1, 2023 through September 30, 2023. The reduced rate for qualifying assessments in dispute will increase to 5% (previously 4%) for the period of October 1, 2023 through December 31, 2023. Localities that assess interest on delinquent taxes may impose interest at a rate not to exceed 10% for the first year of delinquency. Likewise, they are required to pay interest to taxpayers on all overpayments or erroneously assessed taxes at the same rate. (Tax Bulletin 23-7, Virginia Dept. of Taxation, September 8, 2023)