§1604.2.  Insufficient funds check or electronic debit in payment of taxes; penalty

In the event a check or electronic debit used to make payment of a tax, interest, penalty, or fee due under this Subtitle is returned unpaid by the bank on which it is drawn for any reason related to the account on which the check or electronic debit is written, such shall constitute a failure to pay the tax, interest, penalty, or fee due and a specific penalty shall be imposed on the taxpayer in addition to all other penalties provided by law; provided however, upon sufficient proof being furnished to the secretary by the bank that the bank was at fault for the nonpayment of the check or electronic debit, the secretary shall waive the penalty provided for in this Section.  This specific penalty shall be an obligation to be collected and accounted for in the same manner as if it were part of the tax, interest, penalty, or fee that is due in payment of which the check or electronic debit was given and may be enforced in a separate action or in any action instituted for the collection of the tax, interest, penalty, or fee.  The specific penalty imposed under this Section shall be an amount equal to the greater of one percent of the check or electronic debit or twenty dollars.  After receipt of three insufficient fund checks or electronic debits during any two-year period, the secretary of the Department of Revenue may require payment of the taxes, interest, penalties, or fees due by the taxpayer to be paid by certified check, money order, or cash.

Added by Acts 1971, No. 135, §1; Amended by Acts 1976, No. 96, §1, eff. Jan. 1, 1977; Acts 1986, No. 44, §1, eff. Oct. 1, 1986; Acts 1997, No. 658, §2; Acts 2004, No. 65, §3.