At what interest rate is a refund from an overpayment calculated during appeals?

In New Jersey, when a taxpayer successfully appeals for a refund due to an overpayment, the interest on that refund is calculated at a rate of 5%. This rate is established by the New Jersey Division of Taxation and applies to tax refunds that result from overpayments, ensuring that taxpayers receive compensation for the time their funds were held.

The interest is meant to account for the time taken to process the appeal and the refund, effectively compensating the taxpayer for the delay. The 5% interest rate on refunds is a standard figure used to maintain consistency and fairness in how refunds are treated during the appeal process. Understanding this interest rate is crucial for both tax collectors and taxpayers, as it affects the total amount refunded during appeals.

Other rates, such as 2%, 7%, or 10%, do not apply to appeals in New Jersey tax law for calculating refunds on overpayments, which is why they are not the correct choices in this context.