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Late Payment & Overpayment Interest Tables
Years 2010 through Current Year
The Federal Oil and Gas Royalty Simplification and Fairness Act of 1996 (RSFA), requires ONRR to pay interest on federal oil and gas royalty overpayments. The RSFA also allows royalty reporters to calculate interest on royalties and to report this interest on the Report of Sales and Royalty Remittance, (Form MMS-2014).
This reporting option applies solely to federal oil and gas leases and to reports for sales months January 1997 and later. Reporters may begin reporting interest on overpayments and underpayments on Form MMS-2014 for the October 1997 report month.
Underpayment interest on solid mineral and geothermal leases is calculated as simple interest using the United States Treasury Current Value of Funds Rate. Underpayment interest on oil and gas leases is calculated as compound interest using the Internal Revenue Service underpayment rate for corporate tax payers. Overpayment interest on oil and gas leases is calculated as compound interest using the Internal Revenue Service overpayment rate for corporate tax payers.
The following table contains the interest rates used to calculate underpayment and overpayment interest.
The following formula may be used to calculate interest for any period.
|
I = Interest due A = Assessment amount R = Annual interest rate N = Number of days in the year n = Number of days (compounding periods) late |
For interest owed to ONRR, calculate interest from the due date of the sales month to the date ONRR received the payment. For interest ONRR owes you, calculate interest from the due date of the sales month, without regard to an extended due date because of an estimate, to the date ONRR received Form MMS-2014 recouping the overpayment. The overpayment interest rate is currently one percentage point less than the underpayment interest rate. Both rates are compounded daily.
EXAMPLE: COMPUTING INTEREST FOR
TWO INTEREST PERIODS
Principal = $1,382.62
Interest Rates = 60 days at 9% and 90 days at 11%
| Step 1: | R/N .09/365 = .000246575342466 (rounded to 15 decimal places) |
| Step 2: | 1 + R/N 1 + .0002465753 = 1.000246575342466 |
| Step 3: | (1 + R/N)n (1.000246575342466)60 = 1.014902650305980 (rounded to 15 decimal places) |
| Step 4: | (1 + R/N)n - 1 1.014902650305980 - 1 = .014902650305980 |
| Step 5: | A((1 + R/N)n – 1) $1,382.62 x .014902650305980 = $20.60 |
| Step 6: | R/N .11/365 = .000301369863014 (rounded to 15 decimal places) |
| Step 7: | 1 + R/N 1 + .000301369863014 = 1.000301369863014 |
| Step 8: | (1 + R/N)n (1.000301369863014)90 = 1.02749027376513 (rounded to 15 decimal places) |
| Step 9: | (1 + R/N)n - 1 1.02749027376513 - 1 = .027490273764810 |
| Step 10: | Principal + interest from 1st period $1,382.62 + $20.60 = $1,403.22 |
| Step 11: | A((1 + R/N)n – 1) $1,403.22 x .02749027376513 = $38.57 |
| Step 12: | Total interest due: $20.60 + $38.57 = $59.17 |
Please note that the calculated interest for each period is added to the assessment amount and becomes the new assessment amount for each additional interest period. In this example the $20.60 interest calculated for the first 60 days at a 9% interest rate is added to the $1,382.62 assessment base and the result, $1,403.22, becomes the new assessment base for the 11% interest rate for the next 90 days.
Interest Calculator
Interest Table for Years 1997 through 1999
Interest Table for Years 2000 through 2004
Interest Table for Years 2005 through 2009
| Rates Used to Calculate Interest | ||||
|---|---|---|---|---|
| Late Payments and Underpayments | Overpayments | |||
| Period | Indian Oil & Gas Leases |
Federal and Indian Solid Mineral and Geothermal Leases * |
Federal Oil and Gas Leases |
Federal Oil and Gas Leases |
| 01-01-2010 thru 03-31-2010 |
4.0% | 1.0% | 4.0% | 3.0% |
| 04-01-2010 thru 06-30-2010 |
4.0% | 1.0% | 4.0% | 3.0% |
| 07-01-2010 thru 09-30-2010 |
4.0% | 1.0% | 4.0% | 3.0% |
| 10-01-2010 thru 12-31-2010 |
4.0% | 1.0% | 4.0% | 3.0% |
| 01-01-2011 thru 03-31-2011 |
3.0% | 1.0% | 3.0% | 2.0% |
| 04-01-2011 thru 06-30-2011 |
4.0% | 1.0% | 4.0% | 3.0% |
| 07-01-2011 thru 09-30-2011 |
4.0% | 1.0% | 4.0% | 3.0% |
| 10-01-2011 thru 12-31-2011 |
3.0% | 1.0% | 3.0% | 2.0% |
| 01-01-2012 thru 03-31-2012 |
3.0% | 1.0% | 3.0% | 2.0% |
| 04-01-2012 thru 06-30-2012 |
3.0% | 1.0% | 3.0% | 2.0% |
| 07-01-2012 thru 09-30-2012 |
3.0% | 1.0% | 3.0% | 2.0% |
* Solid Minerals interest rates are calculated as simple interest.
If you have interest calculation questions, please call Financial Services at: 1-800-433-9801.